NAIS Fellowship Workshop

Flexible Tuition Models to Increase

AffordabilityNAIS Annual Conference Block 2: Thursday 3.8.18

Presenter IntroductionsNAIS Aspiring Heads 2017-18 Fellowship Group:

Tracie Catlett, Louisville Collegiate School (KY)

Linda Kern, Creative Minds International Public Charter School (DC)

Justin Kleinheider, Thomas Jefferson Independent Day School (MO)

Alicia LaMagdeleine, University High School (IN)

James Palmieri, Trinity Hall (NJ)

Group Mentor: Melissa Soderberg, Head of School, Columbus Academy (OH)

Project Abstract

To combat declining enrollment or demographics, schools have implemented a variety of flexible and indexed tuition models to increase affordability for families, without undercharging capable full payers. The research team will share case studies and feedback from several participating schools to provide considerations for your own school community.

Independent School Industry Response

“Independent schools are experimenting with new market-based and mission-based approaches to tuition and financial aid.” - NAIS

WHY?1. Financial sustainability 2. Rising tuition costs

3. Socioeconomic diversity

4. Enrollment management

5. Improved perception and engagement

Stigma - How we talk about it...Financial AidTraditional term, providing help

Financial AssistanceSlightly more modern, synonym for help

Flexible TuitionReduced tuition to ability to pay

Indexed TuitionTuition at the level a family can afford

“Whether a school discounts its $30,000 tuition with $20,000 in financial aid or says a family’s indexed tuition is $10,000, the family is paying the same amount. “But that difference in presentation matters: The indexed tuition rate seems to make applying to an expensive school possible for some and accepting a discount palatable to others. It is also a great way for a school to compete with other independent schools that may have larger financial aid budgets. It is an approach smaller colleges and universities have taken for years.”

Paul Sullivan, The New York Times, “At Private Schools, Another Way to Say Financial Aid”

The Indexed Tuition Model Tuition Rates are Customized According to Each Family’s Financial Ability to Contribute to Their Educational Expenses.

Otherwise Known As:

● Scaled Tuition● Variable Tuition● Flexible Tuition● Tailored Tuition

Image by Welding School

Methodology We reached out to 10 representative NAIS schools and received responses from 8 of them. We asked 5 key questions:

○ What factors led to your decision to move to indexed tuition

and who contributed to the process?

○ How did you introduce the idea to your community?

○ How has it been received?

○ What impact have you seen?

○ Would you do it again or continue?

Sample Schools1. Duke School, Durham, NC (1947)2. Golda Och Academy, West Orange, NJ (1965)3. McClelland School, Pueblo, CO (1906)4. Wakefield School, The Plains, VA (1972)5. North Cross School, Roanoke, VA (1944) 6. All Saints Episcopal Day School, Phoenix, AZ (1963)7. San Francisco School, San Francisco, CA (1966)8. Trinity School of Texas, Longview, TX (1957)

We greatly appreciate the representatives from these schools who shared their implementation stories and feedback with us.

Qualitative Findings

The Findings #1: Factors leading to the decisionWhat factors led sample schools to their move to indexed tuition and who contributed to the process?

● “Changing the conversation” about financial aid

● A need to address affordability

● Driving more inquiries to the funnel

● CFO, Admissions Staff, Head of School, Outside Consultant

The Findings #2: Presentation of the new modelHow did sample schools announce and implement their new tuition model to their community?

● Broad communication to explain purpose and system

● Board endorsement

● Lots of coverage in marketing materials

● Interactive processes on website

The Findings #3: Community response to changeHow are the new tuition models being received by school communities?

● Increase in inquiries; often also applications and enrollments

● Few returning families expressed concern

● Number of applications for indexed tuition increase

● Net tuition increase

The Findings #4: Outcomes & AdviceWhat outcomes and advice are being observed by sample schools?

● Discipline required for the long haul

● Increased financial aid inquires

● Sparks a conversation with greater transparency

● Enrollment engagement guaranteed but not growth

Quantitative FindingsUsing Form 990 Data from 3 Consecutive Years

Looking at Net Tuition Revenue; Financial Aid Awarded; and the difference between the two

Other Emerging Tuition Models 92 NAIS Schools Participated in a Survey About Alternative Tuition Rates Only Six Schools Offer Special Pricing Tuition Models:

● 1/2 day & Full day options for PK ● Pay-per-class model● Modified for athletes that travel or non-full day students● Dual enrollment (i.e. Stanford Univ. Online High School)

Resources for further readingon the benefits of

the indexed-tuition model

Why consider the indexed tuition model?

#1: Financial sustainability

“The Independent School Financial Model -- Is It Sustainable?” NAIS - The Independent School Financial Model -- Is It Sustainable?, 2016, www.nais.org/magazine/independent-school/summer-2016/the-independent-school-financial-model-is-it-su/.

Basset, Pat. “A Game Changing Model for Financially Sustainable Schools.” Independent School Magazine, Spring 2010, 9-12, http://www.nais.org/Articles/Documents/NewNormalv2.pdf on January 5, 2018.

NBOA Staff. “Effects of Tuition Increases on Enrollment Demand.” Net Assets, INdependent School Management, Feb. 2017, www.netassets.org/viewdocument/effects-of-tuition-increases-on-enr.

Daugherty, W., Hester, W., Weatherill, K., Tuition Trends in Independent Day Schools, Peabody College of Vanderbilt University, 2016, https://www.nais.org/Articles/Documents/Member/CapstoneProject-Revised.pdf.

“Tuition Pricing and Affordability.” NAIS - Tuition Pricing and Affordability, www.nais.org/articles/pages/tuition-pricing-and-affordability/.

#2: Rising Tuition Costs

Asen, R. Scott. “Is Private School Not Expensive Enough?” The New York Times, The New York Times, 23 Aug. 2012, www.nytimes.com/2012/08/24/opinion/is-private-school-not-expensive-enough.html.

Daugherty, W., Hester, W., Weatherill, K., Tuition Trends in Independent Day Schools, Peabody College of Vanderbilt University, 2016, https://www.nais.org/Articles/Documents/Member/CapstoneProject-Revised.pdf.

Lewis, John. “A Sticker Price Problem That's Set to Pop.” NAIS - A Sticker Price Problem That's Set to Pop, NAIS, 2017, www.nais.org/magazine/independent-school/summer-2017/pushing-the-limits-on-pricing/ty, www.nais.org/articles/pages/tuition-pricing-and-affordability/.

#3: Socioeconomic diversity

Newberry, Rick. “An Innovative Tuition and Financial Aid Strategy for Private Schools | Rick Newberry's Blog.” Enrollment Catalyst, 17 Mar. 2017, www.enrollmentcatalyst.com/2014/01/22/an-innovative-tuition-and-financial-aid-strategy-for-private-schools/.

Riff, M., Borden, A. “New Views: Indexed Tuition & Financial Aid.” [Powerpoint Slides]. CAIS Trustee/ School Head Conference, 21 Jan. 2012, https://www.caisca.org/event_info/212/CAIS%20Trustee-Head%20Presentation%201-21-12.pdf

#4: Enrollment Management

Wiener, Julie. “Jewish Day Schools Roll Out Indexed Tuition Plans for Financial Aid.” The Forward, 6 Jan. 2014, www.forward.com/news/190429/jewish-day-schools-roll-out-indexed-tuition-plans/

#5: Improved Perception and Engagement

Sullivan, Paul. “At Private Schools, Another Way to Say 'Financial Aid'.” The New York Times, The New York Times, 21 Feb. 2014, www.nytimes.com/2014/02/22/your-money/at-private-schools-another-way-to-say-financial-aid.html.

“The Ride to Independent Schools. 2300 Families Tell Us About Their Journey.” Home - Enrollment.Org, Secondary School Admission Test Board, Princeton, New Jersey, 2014, www.enrollment.org/whytheyapply.

Note: For an annotated resource list, please go to goo.gl/aCgNTL,

Thank you for attending!