July 2017

by Carissa Uhlman,

Vice President of Student Success, Inceptia

The Financial Aid Office in Transition:Adapting to Meet the Needs of Millennials and Gen Z

Research Brief

Executive Summary

Perhaps more than any generation before them, the Millennial and Gen Z generations are forcing higher education

institutions to adapt to their needs and preferences. As “digital natives,” these students are demanding that

schools employ technology and online solutions to address what have traditionally been paper-driven processes.

And with an overwhelming majority of Millennials reporting the financial aid process is confusing (74 percent) and

stressful (76 percent),1 the financial aid office, perhaps more than any other campus department, stands to reap

the greatest benefits as a result of meeting these technological demands.

Just employing technology, however, does not necessarily ensure student success, nor does it replace critical

interpersonal interactions. A balance must be found between transactional and transformational services to provide

students with the best experience—a balance that can only be achieved by better understanding what defines

“best experience” for these generations.

This research brief aims to help schools develop strategies to better align student financial aid expectations with

institutional outcomes by:

• Understanding the Millennial and Gen Z mindset.

• Identifying how they prefer to communicate and engage.

• Observing cross-industry best practices and adapting them for financial aid processes.

• Identifying technological solutions to unburden the financial aid process.

© 2017 Inceptia

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Understanding the Millennial and Gen Z Mindset

The Millennial and Gen Z generations—ranging in age from young teens to adults in their mid-30s—outnumber all

other generations combined. But their profound influence on technology and digital communication exceeds even

their numbers. As “digital natives,” growing up fully immersed and accustomed to technology, both generations

have taken the lead in seizing new platforms, from mobile to social media to the latest apps.

As a result, these students show great loyalty to and trust for organizations that use technology in interesting and

innovative ways—and that fully embrace how these generations want to engage with them. Here are four of the

key attributes of the Millennial and Gen Z digital mindset:

1. Self-Reliance

Because they are digital natives, these generations are more than accustomed to finding information online on

their own, without much (or any) handholding. Recent research has shown that 70 percent expect a company

website to offer some level of self-service.2 Automation is key for these students, with plenty of opportunities

available for easy form and question submission, self-help troubleshooting, how-to videos, FAQs, etc.

2. Immediacy

Millennials and Gen Z have grown up expecting immediate responses and real-time flow information. In fact,

25 percent of Millennials expect to get a customer service response within ten minutes of reaching out via

social media, and more than 30 percent expect the same speed of response via text messaging.3 They also want

content presented in short, easily-digestible blocks that do not take much time to view and share.

3. Seamless, multiple-device experience

Millennials switch between laptops, smartphones, and other devices about 27 times per hour.4 They demand

online experiences that are responsively-designed and optimized to work across a number of mobile devices.

This is not surprising given the following student statistics:

• Almost 100 percent own a mobile phone.

• Almost 90 percent own a smart phone.5

• Almost 70 percent access the Internet through a combination of mobile and desktop.6

4. Empowered communication

Millennials and Gen Z are technologically empowered generations. As a result, they want to decide how to

interact and communicate with organizations. Not the other way around. Face-to-face communication, including

phone calls, is not their preferred method; in fact, 76 percent of Millennials prefer to receive texts instead of

calls.6 Offering multiple channels and ways to connect so they can self-select is key to keeping them interested

and on-board.

© 2017 Inceptia

Yet, despite the preference to communicate via technology, Millennials and Gen Z still value interpersonal

communication. In the same study in which Millennials rated the financial aid process as more stressful than

applying to college, 81 percent indicated that speaking to a financial aid professional can help reduce that stress.1

Additionally, a Barnes & Noble College study shows that, despite being tech-savvy, “…Gen Zers value face-to-face

interaction and collaboration.”7 They view the learning process as an integrated experience that encompasses both

online and real-world conversations.

At first glance, the desire of these digital natives to maintain human interaction can seem contradictory. Yet, for the

financial aid office, it makes perfect sense: the ability to offer more self-service or automated options can actually

free staff members to facilitate more quality interpersonal interactions with students. But how do you decide which

services can be provided via technology? By looking to how Millennials are interacting with the financial services

industry, we can begin to draw parallels in best practices that can be applied to higher education.

Millennial Trends: What is Working for Financial Service Providers

What can the world of academia learn from the financial services industry? Why is it worth studying trends in

a non-academic industry to improve higher education services? Because, as we look at Millennial expectations

and frustrations with financial service providers, we can see many similarities that translate to the financial aid

experience. And because the financial services industry has had to invest time and money to determine the best

ways to engage Millennials, a group that does not respond to the status quo model that financial service providers

have always counted on to do business, higher education institutions can learn from this considerable research and

resulting successes to create progressive policies designed to empower Millennials and Gen Z students.

First, consider the following Millennial statistics in regards to personal finance and banking:

• They severely underestimate their average debt: $26,619 estimated versus $52,210 actual.8

• 59 percent report feeling like they are “going it alone” in regards to their finances.8

• 71 percent would rather go to the dentist than listen to banks.9

• 94 percent of consumers under 35 actively use online banking.10

• 59 percent find it very useful to receive texts regarding account activity, payment reminders,

and fraud alerts.6

2 © 2017 Inceptia

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A second set of statistics reveals Millennials biggest frustrations when dealing with banks:

With the first statistic set, we can see, similar to students and financial aid, the parallel example of Millennial

consumers who are clearly in need of and desire professional help, but want to receive such help and

communication on their own terms. Additionally, with the second statistic set, many of the frustrations that

Millennials have with banks are mirrored by both students and staff in regards to financial aid: unable to resolve

problems, long lines, and an inability to complete items online.

So what has the banking industry done to affect a sea change in how they interact with Millennials? Simply put,

they have outlined what these consumers want, and then defined how they can best meet these needs:10

© 2017 Inceptia

What Frustrates Millenials Most When Dealing With Banks?

Difficulty resolving problems

Standing in long lines

Inconsistent experience

Technology failure

Inability to carry out a transaction online

Limited options/inability to customize my experience

Unpleasant interaction with employees

55%

37%

23%

33%

29%

16%

22%

What Frustrates MillennialsMost When Dealing With Banks?11

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Millennial Must-Have List

• Want real-time information.

• Want to decide what information to receive and how to receive it.

• Want institutions to keep current with electronic transaction capabilities.

• Want to gather information through messages and access information on the fly.

Institution Must-Do List

• Offer real-time accessibility.

• Communicate via the user’s preferred method.

• Offer online options (including apps).

• Be a partner, not a hero—collaborate.

• Interact in ways that are empowering.

Drawing upon these best practices, financial aid offices can build their own “financial aid must-do list”

in order to maximize the student experience for Millennials and Gen Z:

© 2017 Inceptia

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Financial Aid Must-Do List

When possible, utilize student portals/online account systems to allow students to monitor

their own financial aid information. Be sure to post relevant messages there, e.g. FAFSA

renewal time, upcoming aid deadlines, disbursement dates, etc.

Don’t forget to share vital information via the student’s preferred mode of communication.

Texting is a favorite for Millennials and Gen Z; more institutions are increasingly investing

in this option, either as part of an internal system or utilizing external vendors. If your

institution has not yet committed to this technology, we encourage you to use the data

provided herein to support a proposal to bring texting to your campus.

Aside from online portal/student account access, is your financial aid site user-friendly?

Is it up-to-date with relevant information? Can students ask general questions or

schedule appointments via the web? Do you have social media accounts that are actively

monitored? These are just a few examples of how you can better maximize your online

presence to increase student satisfaction.

As mentioned previously, Millennials and Gen Z are accustomed to being self-directed

and self-reliant. So if they come to you with questions, it is because they are looking for a

partner in a transformational interaction—not necessarily a pedagogue in a transactional

meeting. Yes, there will be times that transactional meetings are all that is necessary. But

if you are able to enact the previous suggestions, you may see this resulting shift in the

nature of your student appointments…

…which will result in more empowering interactions. By teaching a student to better

understand the financial aid process, you can empower them to become better stewards

of their own financial aid. Thus by investing in the tools and resources that Millennials and

Gen Z are demanding, we can move from the practice of giving them a fish to teaching

them how to fish.

© 2017 Inceptia

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Additional Opportunities to Better Serve Millennials and Gen Z

By looking at the different touchpoints of the student aid lifecycle, we can easily identify additional key

opportunities that lend themselves to the automation and technological assistance that these students desire.

Using online resources at these critical junctures, students can experience both an unburdened financial aid process

and greater self-empowerment to complete and manage requirements.

Verification

The complicated process of submitting additional paperwork is stressful for students, while the cumbersome

requirement of tracking down and uploading documents can hamper the ability of the financial aid office to

efficiently process packaging. An online verification portal can alleviate headaches on both ends by allowing

students to upload and track requirements in real-time.

Professional Judgements

Much like an online verification portal, a self-service professional judgement option allows students to take

immediate action to submit documents and track processing. With the expected increase in professional

judgements due to PPY FAFSA, this online option can dramatically increase student satisfaction and free staff to

focus on time with students.

SAP Appeals

Satisfactory Academic Performance appeals, another paper-heavy manual process, can receive a much-needed

efficiency boost via online automation. Allowing students, faculty, and advisors to monitor document uploads

and requirement completion can move the process along quickly and potentially result in an increased number of

students that are able to remain in school.

Loan Management

As many students crave the knowledge to become self-empowered, offering more opportunities to actively

manage student loans and find concise answers to common student loan questions can provide just the solution.

Many schools are now moving to loan summaries (debt letters) to provide relevant, timely nudges to foster this

empowerment. When partnered with an online site that allows students to access loan information and answers

anytime, the ability to educate students with just-in-time relevancy can make the learning truly effective.

© 2017 Inceptia

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Conclusion

At a time when resources are being scaled back while expectations are expanding, it is understandable that

financial aid offices are feeling the challenge of meeting student demands. With Millennials and Gen Z, especially,

such demands may require institutions to stretch in ways that may be uncomfortable or initially seem unfeasible.

Yet, it is important to keep in mind that what these students are seeking can ultimately create long-lasting

change for the better. Taking advantage of their desire to use technology can dramatically unburden the financial

aid process for staff and students alike, creating a new environment where tedious paperwork processes can

be streamlined and reduced. The end result can create more time for staff-student interactions that focus on

transformational advising and student empowerment, an optimal outcome for everyone.

© 2017 Inceptia

About the Author

Carissa Uhlman. Carissa’s nearly fifteen year collegiate career included roles in admissions, advising, records,

student services, and financial aid. She served as the financial literacy consultant for DeVry’s Columbus Metro, and

she also created an adult learner financial literacy program at Franklin University. She now enjoys building financial

education partnerships with colleges & universities across the country in her role as vice president of student

success at Inceptia.

Carissa received her BA in Communications & Business from Malone University, her Masters of Human Resource

Management from Keller Graduate School, and her business Credential of Readiness from Harvard Business School.

8 © 2017 Inceptia

Sources

1. Milligan, C. (2016, October). Study: Students, Parents Find Student Loan Financial Aid Process Stressful. Retrieved from: http://www.delawarebusinesstimes.com/study-students-parents-find-student-loan-financial-aid-process-stressful/

2. Morris, T. (2015, February). 5 Best Practices for Providing Customer Self-Service with a Full-Service Feel. Retrieved from: http://www.parature.com/customer-self-service-2/

3. Frumkin, T. (2015, April). 5 Ways Millennials are Re-defining the Customer Experience. Retrieved from: https://www.salesforce.com/blog/2015/04/5-ways-millennials-re-defining-customer-experience-gp.html

4. BusinessWire. (2012, April). Time Inc. Study Reveals That “Digital Natives” Switch Between Devices and Platforms Every Two Minutes, Use Media to Regulate Their Mood. Retrieved from: http://www.businesswire.com/news/home/20120409005536/en/Time-Study-Reveals-%E2%80%9CDigital-Natives%E2%80%9D-Switch-Devices

5. Weise, E. (2015). Smartphones Reaching Saturation Among Millennials. Retrieved from: https://www.usatoday.com/story/tech/2015/10/29/smartphones-saturation-millennials-pew-research/74805506/

6. OpenMarket (2016). Why Millennials Text Rather Than Talk. [Infographic]. Retrieved from: http://www.openmarket.com/wp-content/uploads/2016/04/Why-Millennials-Choose-Texting-Over-Talking-Infographic.pdf

7. Barnes & Noble College (2015). Getting to Know Gen Z: Exploring Middle and High Schoolers’ Expectations for Higher Education. Retrieved from: https://www.bncollege.com/Gen-Z-Research-Report-Final.pdf

8. Experian (2015). Millennials and Personal Finance: New Technology, Old Challenges. Retrieved from: http://www.prnewswire.com/news-releases/millennials-and-personal-finance-new-technology-old-challenges-300170913.html

9. Scratch (2014). The Millennial Disruption Index. Retrieved from: http://www.millennialdisruptionindex.com/

10. First Data (2015). There’s No Slowing Down Millennials: Capitalizing on a Growing and Influential Generation. Retrieved from: https://www.firstdata.com/content/dam/FirstData/fdc_site/homepage_v2/millennials/images/millennial-white-paper-FNL.pdf

11. Pilcher, J. (2016, January). Inside the Mind of Millennials: What Financial Marketers Need to Know. Retrieved from: https://thefinancialbrand.com/56818/inside-the-mind-of-millennials-what-financial-marketers-need-to-know/

9© 2017 Inceptia

The Inception of a Movement.

Inceptia, a division of National Student Loan Program (NSLP), is a nonprofit organization committed to offering

effective and uncomplicated solutions in financial aid management, default prevention, and financial education.

Our mission is to support schools as they launch brilliant futures for students, armed with the knowledge to

become financially responsible citizens. Since 1986, we have helped more than two million students at 5,500

schools reach their higher education dreams. Each year, we help more than 160,000 students learn how to pay for

college, borrow wisely, resolve their delinquency issues, and repay their student loan obligations. Our solutions are

designed to support student success by helping financial aid administrators maximize resources, so they can spend

more time focusing on students. More information at Inceptia.org.

inceptia.org | 888.529.2028 | @inceptia