Report: Over 50% of Financial Aid Professionals Are Likely to Seek Other Employment Opportunities
By Maria Carrasco, NASFAA Staff Reporter
In a year where many financial aid offices feel overworked due to FAFSA simplification, administrative burden, being short-staffed, and more, a new report from the College and University Professional Association for Human Resources (CUPA-HR) and NASFAA found that over half of financial aid professionals are likely to seek other employment opportunities within the next year.
This new report, most of which drew on the responses of 6,073 financial aid employees at 956 institutions, explores the financial aid workforce, touching on employee pay and pay equity, staffing, diversity, and retention, along with recommendations institutions could take to increase retention in their financial aid offices.
“If we’ve learned anything from this last year, it’s just how critical financial aid administrators are to ensuring students can access postsecondary education,” said NASFAA President & CEO Justin Draeger. “Financial aid professionals are a vital part of the campus ecosystem, keeping students on track to graduate, ensuring the right taxpayer and donor dollars are going to the right students, and maintaining institutional eligibility for federal and state funds, and it’s equally vital they are recognized and fairly compensated for that work.”
In CUPA-HR’s 2023 Higher Education Employee Retention Survey, higher education employees were asked several questions on retention, including if they plan to seek other employment opportunities in the next 12 months. For financial aid employees, over half, 56%, said they are at least somewhat likely to seek other employment opportunities, and 33% are likely or very likely to seek other employment opportunities.
The desire to seek other employment opportunities was largely driven by pay and salary increases, as well as the ability to work remotely, have a more flexible work schedule, or to receive a promotion or more responsibility.
For employees who were at least somewhat likely to look for other employment opportunities, a majority, 78%, said they plan to look for other employment opportunities at other higher education institutions. That’s followed by nonprofit organizations outside of higher education, at 59%, private for-profit companies, at 55%, and within their own institutions, at 46%.
The new report also examined pay disparities across institutions, finding that the more FAFSA applications the institution processes, the higher the median salary for financial aid positions. For example, chief student financial aid officers at 4th quartile institutions — those that process the most FAFSA applications — are paid 1.6 times what their peers at 1st quartile institutions are paid.
At the same time, many institutions are feeling the pressure of being short-staffed. A survey from NASFAA in 2022 found more than three-quarters of respondents are concerned about their ability to be administratively capable, and more than half are concerned about their ability to adequately serve students.
CUPA-HR and NASFAA’s new report looks at the median number of people per financial aid position, finding that institutions that process more FAFSA applications are more likely to have more resources, including more staff. For example, institutions that receive over 17,805 FAFSAs in a year have a median of seven financial aid officers working. Still, the report noted that more than 1 in 10 institutions (13%) reported having a financial aid office of one.
Looking at retention rates, years in position are lowest among student financial aid counselors, with the position having the highest concentration of people who have been in their position for fewer than two years, at 43%. The position with the highest retention rates is chief student financial aid officers, where more than one-third have held the position for more than 10 years.
Diversity in financial aid offices
This report also looked at the composition of financial aid employees by position, race, ethnicity, and gender and compared their representation among people with bachelor’s degrees, which is typically required of these positions. Within most financial aid positions, women comprise the most employees, the report found. However, the report notes that the representation of women among chief student financial aid officers is lower than the representation of women among lower-level financial aid positions.
And, as the level of financial aid position increases, the representation of people of color also decreases. People of color had the highest representation in student financial aid counselor positions, at 37%, and had the lowest representation among chief student financial aid officers, at 19%. The report also noted that women of color have higher representation in financial aid positions overall than men of color.
Specifically looking at different races and ethnicities, Asian men and women are underrepresented within all financial aid positions, according to the report. The highest representation within the financial aid positions is Asian women, holding 3% of student financial aid counselor positions.
Black men are also underrepresented in all financial positions, with Black men holding 3% or less of each financial aid position. Meanwhile, Black women are more represented in nearly all financial aid positions compared with their representation among bachelor’s degree-holders. Black women comprise at least 6% of all financial aid positions.
Hispanic or Latino men are underrepresented within all financial aid positions, holding fewer than 5% of each financial aid position. Hispanic or Latina women are underrepresented within most financial aid positions, with fewer than 6% being chief student financial aid officers. However, Hispanic or Latina women are well represented among deputy heads in student financial aid and student financial aid counselors, holding at least 7% of these roles.
A key finding of this report was that pay equity decreases as the level of financial aid position increases. Chief-level financial aid positions have more groups that are paid inequitably relative to white men than lower-level financial aid positions. For example, as the report noted, Black women and Hispanic or Latino men are paid equitably within lower-level financial aid positions, but not within chief positions. Additionally, white women are paid equitably to white men in student financial aid counselor positions, but are paid only $0.94 per $1.00 paid to white men in chief student financial aid officer positions.
Recommendations for institutions
The report made several recommendations for institutions to better support their financial aid employees, including retaining people of color and women within the financial aid pipeline, improving pay equity, and considering measures to encourage retention.
The first recommendation asks institutions to evaluate whether their financial aid offices have sufficient staff to process the volume of FAFSA applications that their institution receives. From there, institutions should make plans for how to allocate the necessary budget to ensure proper staffing levels.
The next recommendation asks institutions to compare themselves with the trends found in this report. Institutions should ask themselves how they can improve processes to ensure that diversity is better emphasized in succession planning for financial aid positions at your institution.
And institutions should conduct an internal pay equity analysis of their financial aid office. As the report noted, pay equity declines for women and people of color as the level of financial aid position increases. Institutions should also consider how they could implement retention incentives among their financial aid employees — such as salary increases, remote work, and flexible work options.
For more on how financial aid professionals can advocate for the community, check out NASFAA’s Advancing the Profession Toolkit.
Publication Date: 5/8/2024
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