Myths & Facts About Raising Tuition
For some of us, when it is time for our annual discussion, “should we raise our tuition,” it may sound more like an argument, particularly if it takes the form of, “I do not feel as if parents can afford what we are charging now.” The discussion may also include, “we have to keep our prices low enough so that everyone can afford a Christian education.” An even more suicidal approach may be, “can we find out what the average tuition is in our community and charge a little less?”
Since 1992, we have been providing parent opinion surveys to Christian schools throughout the nation. During the course of these years, literally hundreds of thousands of Christian school parents have been surveyed all across the United States. These surveys have shown that such reactive discussions completely miss the point. In figuring out what “the point” is, let’s look at some Myths and Facts about raising tuition Myths Myth #1: Tuition Must Be Priced So That Everyone Can Afford It If the argument is “we do not want to price Christian education out of reach of the average family,” the answer is: you already have. According to the Pew Research Center, 32% of the US households make under $35,000 and 60% make under $75,000. We suggest that when tuition exceeds 10% of a family’s net monthly income it becomes difficult for them to pay (7% if they’re in an area with very high housing costs). As an example, if a Christian school’s annual tuition is $10,000, that family would need to make at least $100,000 (net) to comfortably make tuition payments without any financial aid. And … that is for one child! Crown Financial says 5% is what a family should budget for private education. So, you have already priced tuition out of reach for the average family. Myth #2: Tuition Is the Most Important Issue When It Comes to Choosing a Christian School When we survey parents they are asked to rate the influences that caused them to choose a particular Christian school. Out of twelve choices, tuition consistently places as third from the bottom. On a scale of 1-5, only 12% of the parents rated tuition at a 5 (“very influential”) while 21% rated it at a 1 (“not influential”). What this tells us is that when parents have made a decision that a Christian education is necessary for their children, tuition is typically a very minor issue. Myth #3: Those Who Take a Long, Hard Look At Tuition Rates Have the Least Money Once a parent has decided that a Christian school is right for their child, income has little to do with where tuition falls as an influential factor in the enrollment decision. Parents who reported family incomes of under $35,000 didn’t rate tuition much differently than those who reported incomes of over $75,000. The primary difference between these two income groups is in how they perceive they can manage debt, and especially how influential tuition assistance is in deciding if they can enroll their children in a Christian school. Myth #4: If Tuition is Too Low, Surely It Can Be Raised Tuition corresponds more closely with financial value than with almost anything else. Financial value is a complex issue because it involves so many facets of the school’s life. Simply raising your tuition will not necessarily increase your financial value. Typically, when more money is put into programming, staffing, and other offerings, then financial value will increase. A comprehensive survey will help you best determine if it is okay to raise or lower your tuition. Facts Fact #1: When Tuition Is A Major Concern to a Family, It Has More to Do with Financial Value than with Family Income or Tuition Rate Parents want to know that they are making a good investment in their child’s life. A basic assumption is that spiritual training and good academics are present. However, the following are the items that our PinPoint Surveys have shown to have the greatest effect on financial value (these could also provide an agenda for improving your school’s perceived value):
Policies. Particularly financial aid, business, discipline and fundraising policies. Other policies were measured, but these topped the list.
Leadership. The leadership variables that rose to the top are: internal organization, board leadership and administrative leadership.
Relationships. First on the list is the parent’s relationship with the Administrator, followed by that with teachers and business office; and then student’s relationships with each other and teachers. Unlike what is usually the case in public schools, parents desire a relationship with school personnel.
Atmosphere. A caring environment: friendliness, responsiveness, sensitivity, school spirit, and student behavior are specific factors affecting atmosphere.
Public Relations. Both the frequency of your communication with parents and the quality (appearance) of what they actually receive.
Curriculum. This includes the courses you offer, how creatively they are delivered, how well you integrate a Biblical worldview and how well you prepare children for college and work.
Parental involvement. Increased parental involvement yields increased parent pride, a better understanding of the school’s mission, and an increase in perceived financial value.
What are all these saying? That these are factors that create and/or destroy financial value in a school. The part these factors play in determining the value of your education cannot be overemphasized. The best way to enhance your school’s financial value begin by developing specific, measurable plans to address each of these critical areas. It is best if these plans are based on measurable objective survey results. Fact #2: Tuition Impacts Perceived Financial Value It is often true that higher tuition and higher perceived value go together. However, you cannot always raise perceived value simply by raising tuition. The kinds of things that a school does with increased tuition are what increases perceived value. Therefore, every increase in tuition should be explained as enabling you to better accomplish your mission. It’s also a good idea to raise salaries and tuition together, so that parents know that at least a portion of their increased payments is going to salaries. Fact #3: Financial Value is Measurable, Can Be Changed, and Must Be Present to Warrant a Tuition Increase Similar to Fact #2 above, any significant increase in tuition must be in coordination with a well-orchestrated public relations strategy, and with an appropriate tuition assistance program. These are not incidental to a successful tuition increase; they are essential. Although nearly every Christian school gives out some sort of financial aid, less than 40% have a structured program. A tuition assistance program that utilizes a third-party service, such as SchoolRIGHT’s Confidential Financial Services (CFS), to objectively assess family need costs almost nothing and speaks volumes about your school’s professionalism. Fact #4: You Do Not Have to Be in A Nice Building and Have Fancy Programs to Generate Financial Value PinPoint Surveys have shown that buildings and fancy programs do not rise to the top as qualifiers of perceived value. They do obviously have an effect, but they are not among the top factors. CONCLUSION Christian schools will do well to understand the myths and facts of tuition increases and should seek objective third-party help, such as SchoolRIGHT, LLC, in order to obtain good and godly advice from seasoned Christian school consultants. When tuition increases are well-planned for, correctly articulated and delivered, Christian schools will find themselves in a better position to excel mission forward and prepare for the future. Christian schools that make decisions regarding tuition increases without correct insight, or by reacting defensively to a financial scenario in the school, are often the recipients of negative and hard criticism and ultimately facing an uphill battle that may not prove victorious.
The sampling of school data in this report: In danger of closing in 2-5 years? (Yes, 8%; No, 92%) Enrollment is: Stable (19%), Increasing (75%), Decreasing (6%) School size: Average (408) Less than 100 (3%), 100 to 250 (28%), 251 to 500 (38%), 501 to 750 (21%), 751+ (10%) School age: Less than 10yrs (14%), 11 to 25yrs (57%), 26 to 50yrs (22%), 51+yrs (7%) Setting: Rural (13%), Suburban (80%), Urban (7%) Sample size: 10,000 most recent responses. © by SchoolRIGHT, LLC., unless otherwise specified. All rights reserved