“Is It a Good Idea to Reduce Our Tuition Since Parents Are Leaving Because They Can’t Afford It Anymore?””

“We’re having difficulty retaining students over the summer, and last year, tried to fill seats by offering a deeply discounted tuition for new students in the upper grades.  Now, families are telling us they can’t afford tuition so they’re leaving again.  Would it be a good idea to reduce our tuition to make it more affordable?”

Another question where the quick answer is a short one!

No.

There are five dangers of simply reducing your tuition.

First, and most obviously, is the detrimental effect it could have on your school’s revenue stream.

Second, parents who still keep their children enrolled in the school could wonder, why after a drop in the number of students in your school, could tuition be reduced?  Could it mean they may have been overpaying tuition in the past?  Such a tactic won’t inspire confidence in the current parent community of the school.

Third, parents who may have been considering your school may begin to question the quality of your school’s program.  In areas where school tuitions are at a particular average level, another school may set its tuition lower to be viewed as the most affordable school, but such strategies have a history of backfiring.  Parents could wonder “what’s wrong” since other schools share their stories with parents, and if they’re saying that they work to keep tuition as affordable as possible, wonder how your school is able to accomplish something that other schools have difficulty doing.

Fourth, if you’re building financial aid into your school’s budget, then cutting tuition could make the extra funds for financial aid disappear, which will negatively affect your ability to offer financial assistance to families with financial need

Fifth, “We can’t afford the tuition,” is usually the easiest reason to give, and the most believable, when a family disenrolls their children from a school.  Truthfully, it’s usually “the last straw” in a string of experiences that were not congruent with actions necessary to create raving fans of your school.  Many school administrators lament not only the fact that parents are disenrolling their children, but also can’t understand why parents can afford vacations during the school year, cruises or new vehicles that come with a hefty price tag.  The reason is that families see the value in the “experience” associated with visiting a different part of the country or the world, enjoying time away from the routine of life, or the feeling they get from driving (note, not necessarily owning) a new vehicle.  As for the school it’s important to realize that the parent (not just the child) must be having a great experience as a member of the school community since they’re the ones footing the bill.  If the school is focused on the acheivements and well-being of the child, and marginalize the involvement or input of the parent, it may not matter how wonderfully the child is flourishing in the school.  They’ll support those experiences where they are made to feel valued and “blown away” by their experience.

And truthfully, it’s very difficult to do that on a shoestring budget.

For those families who are truly experiencing economic hardships, your school should utilize a third-party need assessment provider to assess their financial need objectively, and ask what they feel they can afford to pay for tuition.

But it may be very helpful to speak about your tuition differently than you have been in the past.

Even though parents have changed, children have changed, attention spans have changed, marketing techniques have changed, and technology has changed, school administrators still continue to speak about tuition as they’ve historically done, complete with “discounts” for the 2nd, 3rd, and 4th child of the family.

Let’s consider three things:

  1. Don’t call them “discounts” anymore.  Call them “incentives.”  The net result is the same, but “discounts” are given by stores that want to reduce inventory.  And, if you’re giving discounts and your enrollment is still declining, you’re, in a way, reducing your school’s inventory.  Offering an “incentive,” however, has a positive connotation.  Parents aren’t getting a “deal;” they’re being encouraged to enroll additional children to experience the outstanding educational environment offered by your school.
  2. Rather than the first child being the oldest in the school, flip the model so that the first child tuition is for the YOUNGEST child in the family.  As more students from the family are enrolled, the older students get a reduction in tuition.
  3. Stop speaking about your tuition in 4 and 5 digit figures.  Any 4 digit figure makes the average family today think long and hard about a purchase and the commitment they’ll be making.  That’s why logic today doesn’t win the argument – but emotional excitement does.  Then, that excitement can be rationalized with the right pricing model, one that today’s parents are comfortable with – and that’s a daily or even an hourly rate.  For instance, if your school’s tuition is $4,500, and there are 990 hours in the normal school year, that’s $4.54 per hour…and that’s less than what most sitters charge.

Once again, that’s only a first step of many.  It’s even probably wrong to call it a “step” since a step implies a process.  Perhaps “component” is a better word.  It’s interesting to note that, according to the “National Standards and Benchmarks for Effective Catholic Elementary and Secondary Schools,” published by the Center for Catholic School Effectiveness, School of Education, Loyola University Chicago, in partnership with Roche Center for Catholic Education, School of Education, Boston College in 2012, Standard 13 states,

An excellent Catholic school enacts a comprehensive plan, based on a compelling mission, for institutional advancement through communications, marketing, enrollment management and development.

Please note that these attributes really apply to any faith-based school.  Also note that this Web site began in 2006 saying those things, while the publication reinforces this mindset six years later.  Here are three considerations regarding that paragraph:

  1. A vision is compelling; the mission just “is.”  It is “what” an organization does.  That’s a different systemic conversation that’s included in other articles categorized as “Advancementality” on this site.
  2. This is Standard 13.  It’s the last standard.  Unfortunately, when we see numbered lists, we think that the first is the most important.  More times than not, ALL the steps are important.  Since this is the last one, however, it’s probably the least studied.  Think of your time in the classroom.  Do you ever get to the last chapter of the text?  Usually not.  The only “last chapter” that has ever been discussed in great deal is from the bible.  It’s the Book of Revelation.  If you’re familiar with that book, and I’m sure you are, notice that it too is all about “vision.”
  3. Notice the paragraph starts out with the word “excellent.”  That is, your excellent school NEEDS to have these processes in place AND have someone who is the champion for them.  If you don’t, then, dare I say it, your might be “good” or even “very good,” but are you customers going to pay four and five figures for something that’s “good” or “very good?”  Chances are they’re not.  They expect excellence, and if you don’t meet their expectations, you can expect they won’t be enrolling their children.