Tuition-dependent schools, by and large, budget funds to help families afford the tuition. In my experience working with elementary and secondary schools throughout the United States, these funds are usually considered an expense, targeted to the poor, with the poorest receiving the largest grants. This makes sense from a purely social justice viewpoint. But what if tuition assistance was viewed as both a social justice expectation and a revenue producer?
If your school’s enrollment is at capacity with mostly full-paying families, then this article is not for you. For the rest of us who are trying to stabilize or increase our enrollment, or those trying to alter the racial/economic/geographic/academic profile of the student body, let me present something to think about.
I wrote an article in 2010 for Momentum Magazine titled Saving Money Foolishly that still holds true for today. I reprised the main concepts in a Meitler video in 2020. Yet I believe it is a concept that needs to be repeated as often as possible in order to help schools increase enrollment and their revenue stream. The premise is tuition assistance (aka financial aid) is a revenue producer, not an expense, and simultaneously provides access for many families to experience a faith-based education.
When I was an assistant principal in a large, urban Catholic high school, I learned much from the principal, a wise and widely experienced academic leader. One of his viewpoints was that as a Catholic school, we must be compassionate and serve the poor whenever we can. But, he added, we also have to manage that compassion. I learned that part of managing compassion was considering the various audiences that make up our schools. I learned poor families were priced out of my school by thousands of dollars. That they hesitated to even dream about enrolling their child. I also learned that many middle-class families were also priced out. Their gap was less, but still unmanageable. They saw wealthy students and poor students gaining admission but felt left out. I remember attending a conference during which one of the speakers predicted that Catholic schools would soon be composed only of the upper and lower ends of the economic stratum. That we were about to lose the middle-class.
For years as a Meitler consultant I have been preaching about strategic tuition assistance. I have encouraged schools to use their funds to build enrollment at all economic levels. Typically, schools budget a certain amount for tuition assistance then the school provides grants, often to the most needy families, then move up the economic ladder until funds run out. This is not strategic.
To be a revenue source, tuition assistance must increase enrollment. If a school is 20% or more below its staffing capacity, that is, additional students can be admitted to the school without hiring additional teachers, then there are empty seats that produce no revenue. Tuition assistance can help fill those empty seats, albeit at a discount. But in a school with a $10,000 tuition, isn’t $7,000 better than $0? Isn’t $5,000 better than $0?
Tuition assistance becomes strategic when the school directs its funds to maximize the enrollment increase. While we are duty bound to support the poor and least favored in our community, we do not have to dedicate all of our funds to this imperative. A poor family might need $5,000 to attend your school, but 5 middle class families might need only $1,000 to make the tuition affordable.
Here is another way tuition assistance can build enrollment and revenue. I worked with a Catholic high school in the Midwest that wanted to increase enrollment. When we mapped out the attendance area, it became clear that no students from a particular suburb were enrolled. Most likely these families could afford the tuition, but still did not enroll their child. Some quick market research determined that parents in that suburb did not know much about the school because – no one in their neighborhood attended the school! We quickly developed a scholarship for residents of that particular suburb and soon developed a presence in those neighborhoods.
The underlying premise here is that tuition assistance funds are your money. You should spend that money to benefit the school, in this case by increasing enrollment. We have a moral obligation to help the poor, but we also have an obligation to maintain a financially viable school. My specific suggestion is to take your budget for tuition assistance and segment it to maximize enrollment. The largest portion of funds should go to those least able to afford the tuition. The next x% of funds should go to those who need a little help, that is: middle class families. If there is a specific segment of the population you want to attract, that would be your third allocation. It could be for families from a specific geographic area, or students with a skill you want in order to develop an academic program (science, math, fine arts etc.) or students who balance the overall student body (boy/girl, racial/ethnic diversity, etc.).
With strategic applications of tuition assistance funds, you should have fewer empty, non-revenue producing seats, more vibrant classrooms filled with students and more money to continually improve your facility and programs.