Almost every school I visit offers parents a standard monthly tuition payment plan that spans 10 months. When I ask why that’s so, these are the usual answers:
- “That’s the way we’ve always done it.”
- “Parents like it.”
- “That’s how long our students are in school. They start in August, and the last payment is due in May.”
- “I never thought about it.”
Hardly anyone answers, “Because it hurts our enrollment efforts,” or “Because it’s easy to divide by ten.”
In the days before online payments, even before the calculator, it probably was a standard practice to divide by 10. Tuition was $750 for the year, and paying $75 per month was simple to track on an index card or in a notebook.
But today, when a school’s announced tuition is $4,985 per student, anyone can do “10 math” mentally. Here’s the typical parent-principal conversation:
“So what do you think of our school? Did you enjoy the tour?”
“Yes we did, but tell me, what’s the tuition here?”
“It’s $4,985, but we have financial aid available for those with financial need. We also allow parents to pay monthly.”
“Over how many months?”
Immediately, the parents have divided $4,985 by 10 and the number “498.50” is now in their head. That’s probably higher than any monthly payment they currently have…except for their housing/rent/mortgage payment. And that’s only for one child. If there are three children in the school, we could be looking at a five-figure total, which might rival one’s payment for where they live. Now, the parents are thinking, “We can’t afford that. How will we ever work that into our budget?”
Here’s a suggestion – change your “standard” installment payment to 9 payments. You’re now saying, “But wait a minute! That number’s going to be higher…over $500 a month for one child!”
That’s not the point. The point is that most people can’t do “9 math” mentally. That allows you to keep the parents focused on the remarkable qualities of your school, rather than on their wallets. If they get out their phone to use the calculator app or start doing math in their notes, that’s where you ask what they’re doing. If they say they’re figuring out what that’s going to cost per month, then, you can say, “So you’re willing to pay the full cost of tuition? That’s a great gift to our school, and it requires sacrifice to make such a commitment.” If the parents respond with, “Oh, no, we’re just trying to see what this is going to cost,” then the conversation moves to the application stage. “Before you do that, let’s take the next steps and complete this application form, and with it, a financial aid application form. Once we review the application and know we can meet your educational expectations, and enroll your child in our school, we can customize your payment plan to suit your particular financial situation, and we can even accept a down payment to make your monthly payment even lower. So, if you think this is an environment where your child will thrive, then let’s take the next step rather than just jumping over it.”
Remember, your “9-pay” payment plan is the “standard,” and there’s no reason you can’t offer a 10-, 11- or 12-month plan (or even an “every other week” payment plan) to those families who really need a little more individualized flexibility. There are many schools that have registration fees, but if a parent wants to enroll their child in your school, then they may be willing to pay a down payment, helping to solidify your school’s enrollment for the coming school year. Not offering a down payment gives parents the opportunity to change their minds during the summer, giving you that “what happened?” feeling when the child doesn’t show up on the first day of school.
Your school may have a registration fee. A number of schools I speak with have a fee that ranges from $25 per family to $195 per family. If your school has a registration fee, and you’d like an easy way to develop a 9 pay payment plan, send an email to me by visiting this link and use the words “9 pay plus registration fee” in the subject line.
“Customized payment plans?” “Meeting parent expectations?” “Individualized flexibility?” Yes – that’s what today’s parents want to hear . You’re offering them a “personalized” experience. And even amid economic difficulties, parents will still pay for excellent “experiences.” Just ask those that asked for an adjustment in their tuition agreement so they could enjoy a cruise, took time out for a vacation, or are driving a new vehicle. Please note that I didn’t say “purchased” a new vehicle. Listen closely to the commercials for vehicles today. They don’t mention “owning” a car anymore; they talk about the “driving experience.” Today’s parents of young children are of a different generation than they were a decade ago. They “like” and “share” their experiences with their “friends” on social media. Make their “experience of your school” one that they’ll want to “like” and “share” too.
© Michael V. Ziemski, SchoolAdvancement, 2015-2017 (Original Publication Date: 20150121)