Author’s comment: This article was so popular I turned it into a presentation for several regional conferences a couple of years ago. It was published as part of the FACTSMGT blog several months ago, and it’s become their most popular blog post. It may become a course too, so stay tuned!
Last week we looked at a marketing strategy; this week, we examine an asset management strategy.
At first glance at the title of this post, you’re probably thinking this is some type of scheme that, on a grand scale, may have caused the collapse of Wall Street and our banking system. You must remember, however, that greed and irresponsibility were at the root of those failures. We have a responsibility to be good stewards of the gifts entrusted to us – and one of those gifts is creativity.
Just because you don’t have financial aid funds is no reason to say, “We don’t have any more financial aid to allocate.” That’s not going to increase your enrollment, and, in fact will create extremely negative word of mouth marketing. And negative word of mouth spreads at least 250 times faster than positive word of mouth does.
To be clear, this is a very important, useful and wise strategy to learn. Those who learn it will succeed in growing their school; those who don’t will have to face the potential consequence of its closure. Indeed, that is how important and powerful this strategy is.
When the schools I worked with had some financial aid funds to allocate, they could do so either one student at a time, or wait until a large group of students had applied. That’s why everyone applied early, since funds were awarded on a first come, first served basis, according to financial need. When aid funds ran out, the folks who answered incoming calls from parents said they no longer had aid, which made those parents turn away.
If, as a school administrator, you tell parents there’s no financial aid left, they’ll be like the rich man who went away discouraged when Jesus told him to sell everything he had if he wanted to follow Him.
If you have budgeted financial aid to allocate, and you reach the point that you’ve allocated all of it, that simply means you can no longer allocate to one student or to one family at a time. You must wait until a number of parents have applied for their children to be accepted in your school, and have completed their respective application for financial aid. This is also why it’s critically important to keep that enrollment pipeline filled! Marketing and Enrollment is a 12-month, year-round job!! When you have a number of applications, you can determine the need of each student (through a third-party objective assessment service) AND discover what amount parents say they are able to pay for each of their children.
What you’ve been doing through most of the year is allocating financial aid based on a family’s financial need. When you run out of financial aid to allocate, the “allocation mindset” needs to shift to your school’s financial need, and start working on that “family ability to pay” side of the equation, so that their ability to pay fills your “need.”
The best demonstration is through an example, so let’s suppose you school’s announced tuition is $4,000 per student, and you “have no financial aid funds left.” However, you only have $10,000 to go to make budget. There are six students that have applied for aid through your third-party assessment provider:
– 3 are from one family have $3,000 of calculated need for each child, so that each child could attend your school for $1,000.
– 1 is from one family that has 0 need, so the child could attend your school for the full amount of $4,000.
– The 2 other children need $1,000 each, so each could attend your school for $3,000 each.
If you were looking at each family individually, you would be able to accept the one child that had 0 need, but turn the other 5 away.
If you shift your focus to what a family can actually pay for the student, rather than what they need, you might find you could offer quite a bit of aid:
– The family with 0 need says they can indeed pay $4000.
– The family with $1,000 calculated need for each student says they can pay only $2,500 for each child. Note that amount is $500 less than what their calculated ability to pay is.
– The family with 3 children say they can pay no more than $500 each (even though that’s $500 less per child than their calculated ability to pay).
With me so far?
Even though you “don’t have financial aid funds to allocate,” you could award:
– $100 in aid to the family that had 0 need (just because you really want to enroll their child), and award these funds as “scholarship” if the child has an excellent academic record;
– $1,600 in need-based aid for each of the 2 children that had $1,000 of need, resulting in a tuition of $2,400 each – which is even less than what the family said they could pay; and
– $3,500 in aid to each of the children in the family of three, awarding MORE aid than their calculated need, but also meeting what the family said they could pay!
If you do that, you’d be collecting $3900, $2400, $2400, $500, $500 and $500, which totals $10,200. You will have met your budgetary need of $10,000, have $200 in extra income (perhaps for additional aid for another family), and have not only met, but exceeded, the need of each of the families you’re working with here, creating a win-win-win situation.
The result – you’ve awarded $13,800 in financial aid without having $13,800 on hand to award, and you have 6 more students in your school.
Remember, the only thing that increases during difficult economic times is innovation, which is why many successful businesses start during difficult economic times. All you need is a little creativity, and a little inspiration. Also remember that “inspire” means to “breathe in.” When we can take some time and breathe, rather than be rushed to come to a conclusion, we can count on the Holy Spirit to provide the wisdom, knowledge, fortitude, courage, and understanding to deal with the situation. Mix in a little piety to ask for such resourcefulness in prayer, and finish up with awe to thank Him for all His gifts. Awe-some, indeed!
© Michael V. Ziemski, SchoolAdvancement, 2006-2020