I was thinking of calling this article “IH82W8,” which I once saw as the license plate of the automobile ahead of me while stopped at a traffic light. After smiling to myself regarding the irony of the situation, I began to think about the driver. How old was he? Why did he hate to wait? I realized that if he’s between the ages of 36 and 55 (adjusted for the current year), he could be a member of Generation X (the ME generation). It was not only the first generation to realize that their financial situation may not be better than that of their parents, as well as the generation which grew up in an abundance of single-parent households, but it was also the generation that was able to have “instant gratification” provided to them.
The first members of Generation X were born around 1965, and in 1966, Bank of America created the first “general purpose” credit card when it formed the “BankAmericard” brand. It’s still around today…but we know it better as VISA (Source: http://www.creditcards.com/credit-card-news/credit-cards-history-1264.php). Just as today’s “Digital Natives” can’t remember a time when there wasn’t an iPad, members of Generation X can’t remember a time when “layaway” and “saving for a rainy day” was the norm.
How has this generational mindset affected the way parents with children in tuition-paying schools think? Let’s start with an example to illustrate the point.
Imagine you’re going to buy a new car this weekend. Being the savvy buyer you are, you’ve done your research online and know what type of car you’re looking for, and what you should reasonably expect for your trade-in. Additionally, this is the time of year when retailers (they’re not called dealerships anymore) are looking to get rid of current inventory. Note that’s it’s not called a “sale” anymore…it’s not called “clearence” anymore either. It’s the “Summer Celebration Event!” Why? What would you rather go to? A “Clearance Sale” on the old models, or an event to celebrate something? That’s a lesson in marketing you need to understand to capitalize on the audiences you’re trying to attract.
Let’s say you’ve made an appointment for a Saturday and made sure you had your mask as you traveled to the retailer to speak with a salesperson. Your “vehicle consultant” is paged to come to the reception desk. After getting a cup of coffee for you, the consultant engages you in communication about the lack of rain, or how interesting your mask is. When you start talking about cars, you find that they have something “close” to what you’re looking for, and it’s even been sanitized so you can drive it. You come back inside, and they evaluate your trade-in. Surprisingly, it’s right around where your research showed it would be. To make things even better, there’s “incentivized financing” (note that it’s not called “discounted” either – that’s also very a very important concept to understand) at 0% for 48 months of payments, or you’re presented with leasing options. You’re blown away, can’t wait to drive your car home, and tell all your friends. Of course, you fill out all the necessary applications and get ready to sign all the paperwork.
But something happens. Because it’s Saturday, you’re told that you’ll have to wait to take possession of your new car until you’re cleared for the special financing deal since the banks won’t be open until Tuesday. Unfortunately, that means making another appointment, and you were really looking forward to enjoying your new car this weekend! You’re told that you could come back next weekend, and, if everything cleared, you could sign everything then – as long as the special financing was still available, and as long as your trade-in came back in the same type of condition it’s currently in, with no dents, dings, chips in the windshield, nor service engine light lit, it would still be worth what you were quoted…but the value could be lower, which means your price will increase.
That really doesn’t happen anymore…but about 15 years ago, except for the masking sanitizing, that happened all the time!
Today, financing decisions are made on the spot, deals are done, paper are signed and cars are sold. It’s the expectation that once the customer is ready to move forward, the sale moves forward. Current research shows that an interested consumer is about 70% of the way through the sales process before they set foot in the showroom.
Now, let’s look at your school. Since today’s parents have been trained to expect this type of immediacy, how long do you think parents want to wait for a financial aid decision once they’ve decided your school is where they want to enroll their child? Yet, here’s the process I’ve found happening in many schools today:
Registration begins in January. Financial aid application deadlines are April 15th, because tax returns aren’t due to the government before then, and the committee your gathers to assess a family’s financial need won’t look at an application until all the paperwork is in. Then, the committee compiles the results which you receive a month later, but the problem is that by this time, the school year has ended. And today, with the pandemic, the tax deadline was extended to July 15th – three months later! If you use a financial aid provider that only processes applications once all the tax documentation has been submitted, this puts you three months behind schedule! Once the awards are reviewed and approved, letters must be prepared to be sent to parents which tell them, “Congratulations!” They’ve been awarded $500 in financial aid, and their tuition bill is now only $3,500 instead of $4,000 (even though the parents noted they could only afford to pay $3,300). What’s more, the letter was sent via US Mail, so parents receive it at their home in August…and school starts in just a few weeks.
The usual response when I present this situation is that if parents have an issue with the extra $200 they’re being asked to pay, that’s only $20 a month, and that can be handled in a conversation. While that may be true, there are two other issues that have surfaced even before the in-person conversation becomes a possibility. The first one is a common frustration among those who evaluate and award financial aid; the second one, however, is usually not recognized, since financial aid folks are incredibly busy awarding aid all through the summer with the hope that children show up for school on the day classes begin.
The above scenario happens with a parent who has followed all the deadline criteria. That means they’ve read everything. And guess what parents today don’t do? That’s right – read.
I’m sure you’ve experienced families that have just moved into the area during the summer and missed the financial aid deadline, or those returning families that routinely get the information in “when they can,” or file for an extension on their taxes, and therefore won’t have supporting documentation until October (and possibly January this year) after school has begun. You may have also heard school personnel telling families, “I’m sorry, but there’s no financial aid left for this year,” even after they’ve been coached regarding how to provide financial aid when there’s no financial aid remaining.
Telling a family they’ve “missed the deadline” is not the way to grow a school, but it’s a great way to watch it shrink.
The other issue is the more insidious one, and relates to this article’s title and introduction. It’s time lag. If the parent paid a registration fee in January, they may receive a financial aid award letter in June…or later! Remember that enrolling a child in a school is an emotional decision. Parents are excited. The longer it takes for the school to come to a financial aid decision, the more the excitement deteriorates. Unfortunately, the parent may have decided not to wait after an amount of time has elapsed, and may have enrolled their child in another tuition-charging school whose response time was much shorter, or in a public, charter, cyber or other type of educational environment that the parent perceived to be more responsive to their needs and expectations.
Notice the importance of perception, since perception is, in today’s parents’ mind, reality. Just as today’s Web sites are built with Responsive Design as part of its architecture (which means that the screen automatically adjusts to the type of device the viewer is using), what I like to call “Responsivity” is a key trait individuals are seeking in any type of relationship – monetary, personal or social – they enter today. When it comes to communication, emails were expected to be answered in short order when they were introduced. When inboxes began to clutter, and people chose to check email only once a day, texting became the new “important communication” vehicle, as we’re currently compelled to respond to a text immediately. Similarly, with commerce, especially via the Web, every customer wants businesses they deal with to be responsive to their needs with chat capabilities and 24/7 service. It’s somewhat of a control mechanism too, since it’s been ingrained into our collective psyche that “the customer is always right.” While that may or may not be so, the customer has many ways today demonstrate their control, especially via social media, review sites (like Yelp and TripAdvisor) and though word of mouth communication with their peers.
You may wish to study the tools your school utilizes, and, in particular, the one which evaluates a family’s financial need. It’s important to work with a company which realizes your school, as its customer, should be in control of its processes, and relinquishing that control to the way things were done 20 years ago may be in complete opposition to what today’s parents’ expect. If you’re not using a service, and are still expecting parents to disclose all their financial information directly to your school’s financial aid committee, you may find today’s parents are reluctant to do so due to concerns regarding the protection of personally identifiable information (PII) and financial details, as well as the inability to provide an objective estimate of a family’s financial need.
Considering that many colleges and universities expect FAFSA applications to be completed by January, even while they’ve accepted students four or five months prior to that time, what type of learning experience will parents receive if applications for elementary or high school financial aid are only due in March or April? Even if they’re due then, can you communicate an estimate of a financial aid award immediately to parents of prospective students?
If your answer is “no” or “I don’t know,” and the enrollment at your school has been declining, there’s probably a good chance that the parent with the “IH82W8” license plate doesn’t have his children enrolled at your school.