December: Talk About Your School’s Tuition Differently Than You Currently Do

Here’s a typical phone conversation at any faith-based or private school.  Perhaps you’ve had it happen at yours:

“Thank you for calling All Saints Academy.  How may I help you?”

“Hi. I have a quick question.  Can you tell me what your tuition is?”

“Sure. It’s $4,350…”

“OK, thank you.” Click….buzzzzzzz.

Some phone calls like that aren’t even made anymore because tuition is posted on the school’s Web site.

Have you ever taken a good look at which companies “advertise” their prices?  That’s right…those that have products or services offered at “less than retail” or “discounted” prices.  Consumers that seek price information are always looking for the best “deal.” Many schools have offered financial aid to those families that have demonstrated financial need, but families that have no financial need still want the best “deal” they can get because that’s how our consumer-driven economy has trained them.

So, if your school is experiencing a downward trend in enrollment, perhaps your school’s tuition, plus all the incentives for second, third and fourth child, as well as discounts for members of the parish or of the church, are indeed posted on your school’s Web site.  If they are, I’m sure you can rationalize why they’re there:  “We want to be transparent about out costs;”  “We want to reduce the number of phone calls to our school’s office;” and the list can go on.

Also note that the only entities that list prices online are geared toward inviting people to buy them online.  Chances are that parents today will won’t simply see your tuition, and immediately apply for admission.  They’re going to want to take a tour of your school.

So, may I be so bold as to make this suggestion if you want to increase enrollment at your school, which sounds counter-intuitive: consider removing your “tuition” page from your school’s Web site.

Second, when a parent calls because they’ve visited your school’s excellent Web site and think your school may provide an excellent educational environment for their child, don’t fall into the trap of the above telephone conversation. Rather, speak differently about your tuition, like this:

“We believe our school offers an excellent educational environment, and because of our commitment to educational excellence, our announced tuition is an amount that reflects a substantial value, since the cost to educate our students is higher.  We also have scholarships and financial aid awards which parents with demonstrated financial need can apply for since we want to offer the opportunity to enroll in our school to as many students as possible.  When you break it down, our tuition is less than $X per hour, and that’s before any scholarships, financial aid or other incentives are applied.  Before we discuss financials in detail, though, let’s schedule a time that you can experience our school first hand, and make sure that school provides a good fit for your child’s educational needs. If it is, then we can discuss financial aid and tuition assistance programs, along with our payment policies and plans to make our educational experience an affordable one for your family.  How does that sound?”

If you’re still pressed for a “number,” ask if the parents are currently paying tuition at another school or at a preschool or daycare program. Pay attention to how the parents talks about the tuition they’re paying, and respond in an in kind manner. For instance, if the parent says, “Yes. My son is in a local daycare program, and we pay $6 for every hour we use their services.” You can then say, “That’s great, since our tuition is comparable.”

Seriously?

Yes. Four-digit numbers scare families. I can take my car for a state safety inspection, and it may need 2 tires, front brakes, an a sway bar bushing replaced, and my repair bill will run around $600. But if I add a transmission service, a front-wheel alignment and a radiator flush to get it ready for winter, my bill just went over $1,000. Then the conversation progresses to, “Well, what do I really need to do now?”

Don’t be afraid to break the four-digit figure in to a daily or hourly figure. Monthly costs have always been talked about, and frankly, offering a 10-month payment plan is probably one of the worst things we can do when talking about our school’s tuition. How many times have you had a conversation with a parent that can’t afford that month’s tuition, but they’re driving a brand new luxury car? Do you know why? First, parents will still pay for “experiences” (which is why you need to use the above script that speaks to the “educational experience,”) and automobile retailers never talk about “owning” a car anymore. They speak to “driving” a car for a very “affordable” price. Usually, those monthly payments are a low-mileage lease payment with a hefty down payment and do not include monthly taxes. So when the television commercial says, “Drive a Mercedes for $359 a month,” realize that’s less than the $435 a month for 10 months they’ll pay for their child’s education, and then have to make the decision year after year…especially if there’s more than one child in the family.

To use the tuition number at the start of this article, there are approximately 990 hours of required instruction for each school year. $4,350 divided by 990 equals about $4.40 an hour – which is less than the daycare amount the parent said they were paying. If the parent is paying $25 a day for daycare, since there are 180 days in a school year, that’s a little over $24 a day – and that’s before any financial aid, tuition assistance, or scholarship funds are applied.

Perhaps the issue isn’t cost after all.  It’s that we’re still talking about it the way we’ve always talked about it.  And since the mindsets of today’s generation of parents are different from those of previous generations, sticking to “the way we’ve always done it” could continue to result in continued enrollment decline.

You may be thinking, “This is great for an elementary school, but I’m at a high school, and our tuition is pushing the $10,000 figure.”

If four-figures are scary to a parent, five is even scarier.  Note the difference between “$9995” and “$10,000.”  Also note there is no comma in the first figure.  You need the comma when you move to five figures.

And yet, that’s about $10 an hour before any financial aid is applied.  Think of those things that parents pay $10/hour for, and bring that into the conversation…but not necessarily on your Web site.  If you still feel you need to post your tuition, also be sure to post your cost of education, why the tuition represents an excellent value, and market the availability of need-based financial aid, scholarships and other incentives.  If you’d like some sample verbiage, please send an email to admin@schooladvancement.com with the words “Tuition Verbiage” in the subject line.

Disclosing the cost of education is better than showing all the different permutations of tuition levels, additional child incentives, family cost, or other constructs that put a bunch of numbers on a page.  That makes it look as if your school is all about the money rather than all about the educational experience.  If you have families that can afford more than the announced tuition, they can be encouraged to make up the difference, and in so doing may be eligible to use that as a contribution (be sure to check with your tax professional).  They may also work for a company that will match, double or even triple any contributions they make to the school.

Note the guidance from IRS publication 526 (Source: https://taxmap.ntis.gov/taxmap/pubs/p526-002.htm, accessed 12/15/16)

Tuition, or amounts you pay instead of tuition. You can’t deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. You also can’t deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation.”

The key words are “you must pay in addition to, or instead of, tuition.”  Therefore, if a parent is receiving financial aid, they may not be able to deduct additional funds given to the school.  However, there’s nothing to stop those individuals who are donors or prospective donors to your school (not current parents) from playing a vital role in making up this difference.  Filling the gap between the announced tuition and the cost of education could be a marketable case statement for your Development efforts.

High schools are in a particularly difficult position in 2016 since the vast majority of the parents of students enrolled in your school are members of Generation X…the ME Generation…and want to know “What’s in it for me?”  The “me” doesn’t refer to their children; the “me” refers to the parent…which is why they’re looking for that “deal” as stated at the beginning of this article.   That’s why the in-person “value” discussions need to take place, highlighting programs such as courses at your high school which students can take for college credit at aligned higher education institutions.

The parents of the Millennials are only a few years away…and that’s when things will really change.

© Michael V. Ziemski, SchoolAdvancement, 2014-2016