An Innovative Tuition and Financial Aid Strategy for Private Schools

Ever since the economic recession, cost and affordability issues have been heightened in private, independent and faith-based schools.

Last year I worked with over 30 schools, and in every case, whether the tuition was $4,000, $30,000 or somewhere in between, parents expressed concern about the rising cost of tuition and their ability to afford this education for their child.

Because of this, most schools have experienced a dependency upon financial aid to enroll students and this dependence has escalated in recent years. However, few schools offer innovative programs to maximize net tuition revenue and enrollment.

A year and a half ago I met Marc Levinson and Jeff Escabar at the AISAP Summer Institute. We all served together on the AISAP Summer Institute faculty. Marc is the Executive Director of Mid South Independent School Business Officers (MISBO).   At that time Jeff was the Director of Admissions at Marin Country Day School in Corte Madera, CA, and now he is the Head of School at Marin Preparatory School in San Francisco.

During a sunset dinner conversation overlooking the Pacific near La Jolla, Marc and Jeff brought up this issue of pricing and shared the innovative tuition and financial aid strategy at Marin Country Day School in CA called “Indexed Tuition.”

Marin Country Day School offers indexed tuition pricing for parents. The school advertises a scaled tuition level based on the parent’s financial ability. Parents are encouraged to go through the indexed tuition process if they are concerned about paying the top end of the school’s tuition range, which is nearly $30,000. Their website offers this perspective:

“Among our families are those who can afford tuition at the top of the index and whose philanthropic generosity provides a vital component of annual operating expenses. There are also families who manage to pay tuition at the highest level only by making substantial sacrifice, those who are able to afford only minimal tuition, and those across the spectrum in between.

Because the school is determined to make an MCDS education accessible to families from a wide range of economic backgrounds, the school offers a wide range of tuitions. Financial support for indexed tuition is derived from the school’s operating budget and unrestricted endowment income, as well as from a group of targeted funds established to support student opportunity.”

The key line is that MCDS offers a “wide range of tuitions.” In fact, they advertise that there tuition ranges from $750 to $29,200 (for 6th-8th grade students).

Marin Country Day School has deliberately chosen to provide an education that is accessible to families. The strength of their program is that it is not based solely on the operational budget but also includes an endowment and other fundraising sources to support this strategy.

In a very real sense, every school that offers financial aid is essentially offering a “wide range of tuitions” for their families.

During the conclusion of my two-year partnership with Indian Rocks Christian School (www.ircs.org) in Largo, FL, I presented this concept to the leadership of the school for their consideration. Tim Ferguson, the administrative pastor of the church and school, had previously thought of this concept as a way to fill empty seats and increase enrollment. It helped him, and the school team, to see this program working effectively in another school.

After much discussion and consideration, the leadership of IRCS moved forward with their own version: “Variable Tuition.”  This program was implemented last year and enabled the school to offer varying rates of tuition for families that qualified (essentially the same financial aid process as before). It also gave the school a distinctive marketing message to share to the internal and external community by making Christian education affordable to many more families.

The results of this program at IRCS were exponential as the enrollment grew by 100 students (enrollment increased from 681 to 788 students). The leadership of IRCS focused on net tuition revenue and filling empty seats rather than operating within a fixed financial aid budget comprised of limited tuition discounts. You might be interested in reading a blog post that Perry Banse, Assistant Superintendent at IRCS, wrote on this topic (“What’s Up?” at Indian Rocks Christian School).

Recently, I have seen several other schools that offer a similar approach. Calvin Christian School in Minneapolis offers a Fair Share Plan, Boston’s Jewish Community Day School offers a flexible tuition program, Lick Wilmerding High School offers a flexible tuition plan and Friends School of Boulder offers a sliding scale of tuition.

Is this innovative approach right for your school? 

The following are several questions to consider:

• Are you more concerned about your financial aid expense budget line or net tuition revenue? The only way this program works if you place the emphasis on net tuition revenue. Financial aid is not an actual expense since it is likely a discount at your school rather than real money.

• Do you have empty seats in your classrooms that you could fill? If you do, then this approach could help you fill these seats.

• Do you believe in providing accessibility to your school as a key value in your mission? If you do, then you have the foundation in place.

One of my school clients, Fredericksburg Christian School in VA, believes this is the right approach for them. Their “variable tuition” program is currently being launched. Time will tell if this is approach works for them like it did for Indian Rocks Christian School and other schools.

Are you offering an innovative tuition and financial aid program at your school? If so, please share by commenting on this post.