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Journal of Student Financial Aid
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Optimization Techniques for College Financial Aid Managers
Vol. 40, No. 3, 2010 p. 39
by Donald I. Bosshardt, Larry Lichtenstein, George Palumbo, and Mark P. Zaporowski
In the context of a theoretical model of expected profit maximization, this paper
shows how historic institutional data can be used to assist enrollment managers in
determining the level of financial aid for students with varying demographic and
quality characteristics. Optimal tuition pricing in conjunction with empirical
estimation of matriculation probability functions illustrates how financial aid can
be used to maximize net tuition revenue given institutionally determined
objectives. The model provides insight to the level of price sensitivity of prospective
matriculants at a medium-sized comprehensive private college.