Enrollment & Financial Aid |
Article by Jennifer Osland Hillen
From the November/December 2019 Net Assets magazine
One could argue that almost all students enrolled at independent schools are on financial aid. Unless a school’s tuition price covers the full cost of educating a student, which is rare, every student at that school is effectively on aid. While this perspective may seem extreme, it illustrates the pressures on the traditional independent school business model, as tuition increases outpace inflation, income disparity rises and enrollment is becoming more challenging for many schools.
To explore these pressing issues, NBOA has extended its partnership with the Enrollment Management Association (EMA) to a second year. This year’s focus is expanded from “The Future of Financial Aid” to a broader exploration of the multifaceted independent school business model, which is almost entirely supported by and dependent upon enrollment. We have seen schools respond to enrollment challenges by developing eye-catching tuition models, e.g., “sliding scale” and “flexible tuition.” At the end of the day, however, these are ultimately a repackaging of tuition and financial aid. Schools would do well to consider both sides of the coin, revenue and expenses.
As a first step in this renewed effort, EMA’s Kristen Power and I presented to a packed room of enrollment management professionals and heads of schools at EMA’s recent annual conference. Conversations there and elsewhere have generated these key points for schools to consider.
Independent schools offer a luxury service but seek to cultivate a student body that includes a more complete continuum of socioeconomic statuses. At the same time, it’s hard to imagine independent schools being anything other than tuition dependent, and to meet the bottom line, most schools must carefully consider maximizing net tuition revenue with mission-aligned students. Finally, if value proposition and differentiation are key to survival going forward, discounting tuition simply to fill seats feels like a dangerous proposition, since the goal should be to only enroll students who directly align with your mission and your admission requirements. This may be where the points mentioned above come in — the importance of considering all sides of revenue and expenses, and possibly rightsizing.
As always, we welcome your thoughts on these challenges.
Percentage of students receiving tuition remission
Percentage of students receiving merit-based scholarships
Percentage of students receiving need-based financial aid
Admission FTEs as percent of total FTEs
Total “gap” as a percentage of operating expenses (gross)
Total “gap” as a percentage of operating expenses (net)
Download a PDF of this article.
#Enrollment #Tuition #CashManagement
Resources for Navigating a Disrupted Landscape (web-only, Sep 2019)
Reflecting Pull: Rethinking Financial Aid (Nov/Dec 2019)
5 Minutes with Amada Torres: Changing Faces (Nov/Dec 2019)
School Rightsizing: By Default or Design? (web-only, Aug 2019)
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