Most Christian schools lose families when they raise tuition. They may not drop in enrollment, but they lose lower & middle-income families and gain higher income families. Why? Inadequate tuition aid. If your school is like most schools, you give away a lot of money – mostly to families with multiple children enrolled, or families who are employed at the school, or to pastor’s families. Tuition aid should be granted only for families who have demonstrated an actual need. How can this best be understood?
ONE RULE OF THUMB
So, then the board says, “See, we didn’t need more tuition assistance.” But what really happens? These families will be able to pay a higher tuition until someone gets sick, or their car breaks down, or their house needs a new furnace. Then they’ve got to make a choice. Others may not have emergencies, but they may postpone getting their teeth fixed or buying tires for their car. You can only do that so long. The point is – they will eventually leave.
Many of our clients conduct a parent and employee survey every 2, 3, or 4 years. We have seen repeatedly that schools that do not make adequate increases in tuition assistance when they raise tuition have fewer and fewer middle income families and more and more higher income families. This is tragic. (They usually have help for lower income families, if they’re still there.)
HOW DO YOU KNOW HOW MUCH A FAMILY NEEDS?
The typical Christian school family applying for tuition assistance needs 30-50% of their tuition paid. This means that if 20% of your families make under $60,000, you should budget 30-50% of 20%, or 6 - 10% of your budget for tuition assistance. To know how much each specific family needs you will need to perform a detailed evaluation of their finances, preferably using a third-party service like Confidential Financial Services (30-50% may be too low if your tuition is over $8,000).
If you are trying to recruit lower income families, we suggest that you target a specific number of new lower income students, and even target recruitment efforts for specific grades. Then budget 40% of your tuition for each lower income student you wish to recruit (at $5,000 tuition, this means $20,000 for 10 new lower income students – which would net the school $30,000).
WHAT HAPPENS TO TUITION AID WHEN YOU RAISE TUITION?
If your tuition is less than $5,000, increase your tuition assistance budget 1.5X over your tuition increase. If your tuition is $5,000 or more, increase your tuition assistance 2X over what you increase your tuition.
Illustration: Let’s say your tuition is $5,000 and your tuition assistance budget is 7% of your budget. If you increase tuition by 10%, to $5,500, then you should increase your tuition assistance budget by 20%, from 7%, now to 8.4% of your budget. This is because every time you increase tuition, the percentage of your school’s families who will need help paying tuition will increase.
WHAT SHOULD YOU DO NOW?
HOW WE CAN HELP
Our tuition aid verification program will help you understand what a family has available to pay for tuition. Set-up and annual dues are very inexpensive and families pay a nominal fee to go through the process. Contact us for more information.
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