One of the concerns I hear from principals and business managers in just about every school I visit is that they can’t believe parents have a difficult time coming up with their monthly tuition payment when they can go on vacation or they’re driving a brand new truck, SUV or luxury vehicle. There are two reasons for this: 1) People will pay for “experiences,” and 2) It all depends on how “the numbers” are presented.
When my family went on vacation when I was a kid, my mom and dad and I, along with my aunt and uncle, went. All four of them had full-time jobs, and I was enrolled in a Catholic elementary school. But where did we go? Walt Disney World didn’t exist in the 1960’s, but we would go to the Jersey Shore and the boardwalk in Atlantic City, Sea World in Aurora, Ohio, the beach in Erie, PA (which was covered with dead fish the year we went), or the big trip – Ontario, Canada, where we visited Toronto, Niagara Falls and the Ontario Science Center. You didn’t need a passport in those days, and there were no casinos. Cedar Point was a close drive, but both times we went there it rained like crazy! All the drives were between 2 to 6 hours wherever we went, so we could drive in a day, stay for a few days, then come back home. There were also no Hampton Inns or Courtyards by Marriott then either. If you could stay in a Hilton, a Marriott, or a resort hotel, you were living large. We didn’t. It was a time away from home, usually in a “Motor Lodge.”
Today, vacations are “Experiences” – Walt Disney World and all the Central Florida attractions, a cruise, a trip to California wine country, or a week in Ireland, Italy or Australia. Those are still called vacations, but they’re really experiences. How do you tell the difference? If you come home from your vacation and you feel like you need a vacation, it wasn’t a vacation – it was an “Experience.”
That begs the question, “What is the ‘Experience’ of your school?” But that’s a question for another day. Today’s Next Practice Insight is about “the numbers.”
Several years ago, I visited a Web site for a high school that posts its tuition at $11,000+ for the first student, and $10,500 for the second. Sure, financial aid is available, but 11K? Reading further, I saw there’s a payment plan available, and a parent, if approved, can pay over 10 months.
But that’s what most schools do, right? Your school probably has a 10 pay payment plan because school starts in August or September and ends in either May or June. That’s 10 months…and payments coming in help you to manage cash flow to pay your teachers.
That’s how it worked 30 or so years ago…when tuition for the year was still a 3-figure number. When you crack the 4-figure ceiling, and tuition payments are several HUNDRED dollars a month, we’re now getting into car payment and rent/mortgage territory. Now, there are schools that have cracked the 5-figure ceiling, and wonder why their enrollment has dropped 100 students in the past three years.
What to do about it? At first, this is going to sound counter-intuitive, but read the following section all the way through. All the things mentioned work together systemically.
First, stop providing 10-pay payment plans. Anyone can do 10 math mentally. Parents may be in your school, touring the wonderful facility, meeting great people, and seeing what an excellent educational experience your school would provide their child. Then the topic of tuition comes along. “Our tuition is $11,000 per year, but we have a 10-pay payment plan if that would help make it affordable for you.” Mentally dividing by 10, the focus is now on the cost, and not on the experience of the school. Anything that’s said after this point is overshadowed by an $1,100 a month price tag.
Simultanteously, stop publishing tuition on the Web site, especially if you’re looking to increase enrollment in your school. If a parent calls and wants to know what the tuition is, rather than flat-out answering the question with a number, the answer should be phrased like this: “Even though our tuition may be considered significant, it’s to support the excellent program we have in place. We have financial aid available if that’s a concern for you, but before we even talk about the cost, why not pay us a visit so you can see first-hand what our school is like, and if we’re a good fit for your educational goals for your child.”
Four- and five- digit figures are big…and scary. In the world of Development and Institutional Advancement, consider that many organizations consider anything over $2,500 as a major gift. For donors that have a capacity to give that amount or over, relationships are developed so that these individuals can be personally asked for a contribution of that size. Rare is the case that someone will write a check for $10,000 for an annual appeal letter they get in the mail from an organization, even if they’ve been engaged with it. If $2,500 is considered and “in person” ask, then expecting a parent to simply enroll their child in a school when they see from the Web site that the tuition is $3,500 or even $5,500 is a stretch. Let’s break those numbers down a bit.
If you’ve seen the most recent Mercedes-Benz commercial, or have searched on-line, you may have seen this: “Drive a Mercedes-Benz for as little as $349 a month.” Notice that it doesn’t say “own” a Mercedes-Benz – just “drive” one. That’s a low-mileage lease payment, and then tax must be added, and money is due up front, including a down payment, security deposit and first month’s payment since with the lease, you pay for the car before you drive it.
But that’s all in the small print.
The advertised $349 doesn’t seem all that bad, does it? And, even if the driver is paying closer to $400 a month for the “experience” of driving a Benz, that pales in comparison with the $1,100 a month for tuition at the high school mentioned above. That’s also one reason why people will drive a luxury car, and complain that they can’t afford this month’s tuition payment. They may be paying less than they paid to buy their Honda Accord.
The simple fact is that as school personnel, we’re not very good at sales. Teachers deal with knowledge, with facts, and with information; sales deals with emotions. It’s why you need to get families into your school and let them be part of the experience and feel that they’re already a part of the school community even if they’re “just looking,” even if your school has a waiting list. Somewhere down the road, that waiting list might disappear, and you really don’t want to simply dismiss parents because you’re full right now. You need to always be filling your “pipeline” with prospects. Indeed, enrollment is sales.
So let’s take a look at how we can really talk about that tuition number, and make it a reasonable one.
Most states require 180 days of school, and each school day is at least 5.5 hours. Just for easy math, let’s make that 6. That’s 1,080 hours. If tuition is $11,000, then the real cost of attending the school is only $10.18 an hour…which is a little more than what child sitters are making today. And that’s before any kind of financial aid. If your tuition is $7,500, that’s about $7.00 an hour. Again, before financial aid. That’s a conversation that will start parents thinking about how they can afford to do this, rather than seeing a huge number, thinking that’s out of reach for them, and choosing a different, perhaps even less desirable educational environment for their child – all because they didn’t experience the distinctive difference your school can provide.
One of the most depressing conversations I’ve ever had was with a teacher lamenting the fact that their school’s tuition was so high. “How much,” I asked. “$1,900. That’s a lot of money for some of our families!” I said, “That’s that’s about $1.75 an hour,” to which the teacher responded, “Oh…I pay more than that for parking.” I responded, “And at $10.50 a day, some people spend that on a couple of cups of premium coffee.”
Perhaps your school and schools in your area are extending their school year. If so, the cost per hour of classroom instruction is now even more affordable than ever!
Want to know what kind of payment plan you should offer parents? A 9-pay plan. Want to know why? Send an email to me at firstname.lastname@example.org with the words “9 Pay Payment Plan” in the subject line.