Affordability Strategies
Scott Looney - [email protected]
Head of School, Hawken School
Connecticut Association of Independent Schools
May 14, 2008
1
2001
1965
1929
1983
1946
1921
1900
2
3
External Realities and Trends
Moody’s Independent School Outlook
5
Slide courtesy of Pat Bassett, from “Financial Survivability: The Economic Meltdown –Brutal Facts vs. Unshakeable Beliefs
2007 = first
net drop in
income for
top 5% in
US census
data going
back to
1966
6
What’s happening
over last ten years…
•
•
•
•
Tuition up 30% in real dollars in 10 years
Overall staff up 32% in 10 years
Student teacher ratios getting smaller
Financial Aid Dollars up 38%, but
recipients up only 2%
• Attrition down overall 8%
• Enrollment up by 20%
• Giving up by 20%
Projected Population Growth by State
8
Net Migration by State
9
Connecticut Population
Percent Growth: 2000-2008 and 2013
10
Connecticut Population in School
Percent Growth: 2000-2008 and 2013
11
Connecticut Population by Race
Percent Growth: 2000-2008 and 2013
0.3
0.25
0.2
0.15
0.1
0.05
0
White
Black
Asian
Hispanic
Other
-0.05
2000 - 2008
2008 - 2013
12
Demographic Maps - Connecticut
• Population from 1990 to 2004
• Race
• Average Household Expenditure on Education
13
How Many Families Make That Much?
Percentage of families earning $200K+ with school-age children
US
Boston
Chicago
Los Angeles
0-4
0.59
1.13
0.97
0.97
5-9
0.61
1.14
0.95
1.05
10-13
0.49
0.93
0.74
0.76
14-17
0.49
0.87
0.74
0.73
Total
2.2
4.07
3.4
3.51
Source: Mark Mitchell, NAIS Demographics Center, www.nais.org
The Disappearing Middle Class
The Middle Class:
Dual Income Family
@$75,000
(Source: Harvard Magazine,
Feb, 2006 “The Middle Class
on the Precipice”)
17
18
Affordability Solutions
Affordability Challenge Solutions
• Market Value: Internally and Externally
Satisfaction
Value =
Cost
Benefits
Value =
Price
Internal Marketing
• Reinforcing the value proposition for current
constituents
– About dialog, not monologue
• Formalize listening
– Understand their needs, values and perspective
– About relationships and participation
– Creating a sense of community - belonging
Internal Marketing
• Intentional Commitment
–
–
–
–
–
Head of School Leadership
Cultural shift…from tradition of modesty.
Administrative Coordination
Budget and Responsibility
Market and Constituent Research
• Strategies
–
–
–
–
–
–
Systematize and regularize internal communications
Website (intranet)
Ceremony and Tradition
Gatherings and Meetings
Volunteer training and empowerment
Any other activity that increases awareness, community,
belonging…
Internal Marketing
• Reinforcing the value proposition for current
constituents
– VP for parents: ROI (tangible proof of success) &
happy children
– VP for students: Belonging, achievement,
opportunity
– VP for alumni: Linkage to their success,
Relationships, Tradition, Brand Association
– VP for faculty: being valued for contribution,
relationships
Parents want…
• Their children to be happy and successful
(not necessarily in that order).
• The school to respond to their questions or issues
immediately.
• Parents expect the class size which was
advertised will be the class size their child
experiences
• Parents want to know that the school is a good
steward of their tuition dollars
• The reputation and prestige of the school to
provide them justification to their friends of the
expense.
Most Parents want measurable results
• Standardized test scores
– One of the ways the academic program is judged
• Many schools don’t see high test scores as a trophy to
pursue so there is a conflict with parent expectations
• College Placement
– Many parents believe that attendance at a high
tuition independent school is an implied warranty
to the Ivy League
• Merit Scholarships to college
– Increasingly seen as an indicator of the academic
and extra curricular strength of the student body
Reframing “Success”
• Provide the context and tools by which our
constituents can more appropriately measure
us.
• Helping families measure success, in ways that
align with the school’s mission
• Understand that many families expect
quantifiable data, don’t dismiss this need.
• Alumni success, satisfaction and
accomplishment key to making the case.
• Benchmarking against alternative options
(public, private, parochial)…ie. NELS study.
Percentage of students planning to earn postgraduate
degrees by age 30
Source: NAIS Report “Values Added: The Lifelong Benefits of an Independent School Education” and
Cranbrook Schools Alumni Survey Classes 1980 to 2004
Percentage reporting more than 11 hours of studying per
week during their senior year in High School
60%
50%
40%
30%
20%
10%
0%
More than 11 hours per week of studying
Cranbrook Alumni
NAIS Grads
Other College Freshman
Source: NAIS report “Independent Schools: Preparing Students for Achievement in College and Beyond (HERI Report) and
Cranbrook Alumni survey classes of 1980-2004.
Teenagers in the United States
11,000,000
20% who live in Midwest
2,200,000
25% who would consider leaving home
Research
4% who can afford boarding
25% who are Strong Enough Students
Outreach
& Promotion
Inquiries & Leads
Recruitment
Interviews / Visits
Applicants
Evaluation
Marketing
Yield
Retention
Accepts
Enrolled
Alumni
284
146
94
69
22,000
5,500
1,084
322
550,000
Inquiries
Inquiries
Apps
A
Apps
Accepts
Accepts
Enroll
B
Inquiries
Apps
Accepts
Enroll
Enroll
C
Inquiries
Admission
Funnel
Conversion
Inquiry Conversion
(15% vs. 34%)
Apps
Selectivity
Selectivity (admit rate)
(72% vs. 51%)
Accepts
Yield
Enroll
Comparisons are with NAIS Day-Boarding Averages
Yield
(53% vs. 63%)
Communications Continuum
Qualified Students, Unaware of Your School
Awareness
Inquiries & Leads
Interviews / Visits
Comprehension
Applicants
Conviction
Accepts
Enrolled
Alumni
Action
Personal Selling
1,2,3,4,5,6,7
Sales –Promotion
8,9,10
Publicity
11, 12
Advertising
13, 14
Marketing Communications Hierarchy
1. One-to-one, face-to-face conversation
MOST EFFECTIVE
2. Small group discussion or meeting
3. Person speaking before a large group
4. Telephone conversation between two persons
5. Hand-written personal note
6. E-mail correspondence
7. Computer-generated "personal" letter (managed
correspondence)
MARGINALLY
8. Article in institutional newsletter, magazines, etc.
EFFECTIVE
9. Brochure or pamphlet sent out as a direct-mail piece
10. Mass-produced, non-personal letter
11. News in popular press (newspapers, radio, television, etc.)
12. Press Releases
13. Targeted Advertising in newspapers, radio, television,,etc.
LEAST
14. Diffuse -Passive Advertising, (i.e. billboards,etc.)
EFFECTIVE
Personal Selling
Sales -Promotion
Publicity
Advertising
1,2,3,4,5,6,7
8,9,10
11, 12
13,
14
Marketing Communications Hierarchy
ACTION
1. One-to-one, face-to-face conversation
2. Small group discussion or meeting
3. Person speaking before a large group
4. Telephone conversation between two persons
CONVICTION
5. Hand-written personal note
6. E-mail correspondence
7. Computer-generated "personal" letter
8. Article in institutional newsletter, magazines, etc. COMPREHENSION
9. Brochure or pamphlet sent out as a direct-mail piece
10. Mass-produced, non-personal letter
11. News in popular press (newspapers, radio, television, etc.)
12. Press Releases
13. Targeted Advertising in newspapers, radio, television,,etc.
14. Diffuse -Passive Advertising, (i.e. billboards,etc.)
AWARENESS
Communication Timing
Data / Facts
What
Our
Families
Want
What
We Tend
To Do
Emotion
Beginning
End
Time
Growth Opportunities
4
3
Markets
Market Development
2
1
Market
Penetration
Present
(Diversification)
Product
Development
Products
New
Average and Median Household Incomes for Cranbrook’s Top
Ten Day Student Communities vs. Michigan and U.S. norms.
200,000
Average
Median
150,000
100,000
50,000
0
Bloom. Hills
Birmingham
Rochester
Franklin
Orchard
Lake
Michigan
Average and Median Household Incomes for Harrisburg’s
Top Ten Day Student Communities vs.
70,000
Pennsylvania and U.S. norms.
Average
Median
60,000
50,000
40,000
30,000
20,000
10,000
0
C. Dauphin
Susquehanna
L. Dauphin
Hershey
Pennslyvania
Cranbrook
Harrisburg Academy
200,000
200,000
Average
Median
Average
Median
150,000
150,000
100,000
100,000
50,000
50,000
0
0
Bloom. Hills
Birmingham
Rochester
Franklin
Orchard
Lake
Michigan
C. Dauphin
Susquehanna
L. Dauphin
Hershey
Pennslyvania
Affordability Challenge Solutions
• Market Value: Internally and Externally
• Proactively Attend to Student Retention
Staff Time
Grand Total
Approximately = 64 hours
One
Student
2.5 X 5 hours
= 12.5 hours
Accepts
4.1 X 5 hours
= 20.5 hours
Applications
5.5 X 3.5 hours
= 19.25 hours
Campus
Visits
15.3 X 45 mins
= 11.5 hours
Inquiries
1
2.5
4.1
5.5
15.3
Steps to Limiting Voluntary Attrition
1) Establish a committee:
– Definite Members: Director of Admission,
Academic Dean, Dean of Students, School
Counselor and Business Manager.
– Possible Members: Head of School, Assistant
Head.
– Chair: Director of Admission.
2) Foundation Information: Accurate consistent
retention and attrition statistics
a. Categories with consistent information: name,
graduation year, reason for leaving (voluntary,
involuntary, discipline, medical, academic), date
enrolled, date departed
b. Who will keep this data?…get it right!
Steps to Limiting Voluntary Attrition
3) Meetings (regular)
– Retention Goals
– Enrollment Projections
– Enrollment Policy
» Examples:
a) Counseling out policies
b) year-end review process
c) status switches; day to boarding, vice versa
4) Regular Reports to the Faculty
a) Essential faculty education, their role in enrollment management
b) Head of School’s Support
5) Year End Student Review
– Organize process so there are NO surprises: Another
nightmare…the faculty creates 10 unexpected openings in June.
– Control the Process
Affordability Challenge Solutions
• Market Value: Internally and Externally
• Proactively Attend to Student Retention
• Moderate Tuition Growth
– Grow non-tuition revenue sources
– Reduce operating costs
Rise in Boarding Tuitions
$36,000
$32,000
$28,000
“The most powerful force in the universe…
compound interest.”
Albert Einstein
$24,000
$20,000
$16,000
$33,450
$24,660
Indexed w/ CPI
Tuition
$18,900
$14,200
$12,000
$8,000
$4,000
$0
$10,000
$6,100
$4,100 $5,500
$3,000 $3,600
$2,200 $2,500
$1,800 $2,000 $2,000 $2,500
$7,100
$8,200
$9,500
$12,537
$10,713
"Access and Affordability",
NAIS
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Rise in Day Tuitions
$18,000
$16,990
$16,000
$14,000
$12,000
Tuition
Indexed w/ CPI
$10,000
$11,376
$9,700
$8,000
$7,800
$6,000
$3,200
$4,000
$2,100
$2,000
$0
$1,500
$700
$850
$750
$1,000
$800
$1,000 $1,300
$2,000
$5,300
$2,600
$3,000
$3,600
$5,077
$4,274
"Access and Affordability",
NAIS
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Basis Economic Structure of a Business and a School
Price = Cost + Profit
Cost = Price + Subsidy
“More “Straight
Talk:”
The National
Commission on
the
Cost of Higher
Education
and its
Implications for
Virginia”
Rita J. Kirshstein
David A. Rhodes
American
Institutes
for Research
Profit
Subsidy
Price
Costs
Price
A Business
A School
Business Economics vs. School Economics
A Business
•
•
•
•
•
•
•
•
Price = Cost + Profit
Price reacts swiftly to demand
When demand is up, price
goes up to maximize profit
When demand goes down,
hold a sale to avoid surplus
inventory.
Sales offers can be for short
durations and can be changed
easily
Sticker price reductions are
viewed by consumers as
positive
Pricing strategies reviewed
and adjusted every quarter
Can reduce payroll costs
swiftly
A School
•
•
•
•
•
•
•
•
Cost = (Price – Discount) +
Subsidy
Price cannot react swiftly to
demand
When demand goes up selectivity
and/or price can go up
When demand goes down, tuition
discounting used to avoid surplus
enrollment vacancies
Financial aid offers due to
discounting is for years and cannot
be changed easily.
Sticker price reductions can be
misinterpreted by consumers as a
sign of weakness
Pricing strategies reviewed once a
year, but adjusted less frequently
Cannot easily reduce payroll costs
School Funding Sources by
Moody’s Rating
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Aaa
Net Tuition and Fees
Aa
Investment Income
A
Gifts/Pledges
Baa
Auxiliary Enterprises
Other
•
The PAVS Matrix
Concepts affecting demand and affordability
Prestige – The public perception of the quality of the school
based on its historical reputation of preparing students for ‘success’
• Affordability – the perception of the price of enrolling after
considering any financial assistance from sources other than family.
High affordability means a family thinks the school is within its
means…low affordability is out of reach
• Value – the perception of what a family is receiving for the
money it is paying, whatever the sum. Value results from a variety
of factors including prestige and affordability
• Sacrifice – the degree to which a family is willing to forego
certain things in order to devote a portion of its resources to school
costs that otherwise could be used for other expenses, savings or
investments.
53
Courtesy of Marketing Independent Schools in the 21st Century, Chapter six, “The Affordability Dilemma” by Mark Mitchell
“Relative Demand” Matrix of PAVS
PAVS Matrix
Perceptions of
School Qualities
Highest Demand Schools High Prestige
High Affordability
Perceptions of
Viability
High Value
High Sacrifice
High Demand Schools High Prestige
Low Affordability
Medium Value
Medium Sacrifice
Average Demand Schools Low Prestige
High Affordability
Low Value
Medium Sacrifice
Low Demand Schools Low Prestige
Low Affordability
Low Value
Low Sacrifice
54
Courtesy of Marketing Independent Schools in the 21st Century, Chapter six, “The Affordability Dilemma” by Mark Mitchell
Where does my school fall…
• A School’s price and approach to affordability should
be in line with the school’s actual place in the PAVS
Matrix…not the place to which a school aspires.
• It is hard for a school’s leadership to “own” their true
relative ranking (when it is not the top one), as they are so
personally fond of the school that their loyalty to the
school blinds them to the relative prestige of the school.
• Tuitions at schools are often set in relationship to other
schools that actually in a higher relative position.
• Pricing a school in relation to that of schools in
different “relative demand” position is dangerous in the
long term either risking enrollment shortages (usually) or
leaving too much potential revenue on the table (rarely).
55
“Relative Demand” Based Strategies
• Highest Demand: The Enviable Position.
These
schools have high prestige and high affordability…making
them seem like a good value, regardless of their price. They
have tremendous price inelasticity. Their strategy is to charge
a very high sticker price and promote their need based aid
program to keep qualified applicants in the pool.
• High Demand:
These schools probably find it most
difficult to diversify the student body. Since prestige is high,
it receives many applications and may have waitlists, but
because its affordability is low, only families with substantial
resources can pay the price. They are very near (or slightly
above) their price ceiling. This school needs to aggressively
communicate the availability of financial aid and this school
needs to market the value provided.
56
Courtesy of Marketing Independent Schools in the 21st Century, Chapter six, “The Affordability Dilemma” by Mark Mitchell
“Relative Demand” Based Strategies
• Average Demand: Although less prestigious, this school is
still considered just as affordable and may be more accessible. This school
might have some difficulty diversifying socio-economically as higher
income families may be less willing to attend due to the lower prestige
perception. Those full-pay families have unlimited choice and are drawn
to higher prestige schools. The solution for these schools may be to offer
an incentive-based, merit oriented program in addition to its need based
program to attract the wealthy, high achieving students who might
enhance its prestige and widen its socioeconomic diversity.
• Low Demand:
The most difficult position. It is neither
prestigious nor affordable. Few will be willing to make a sacrifice to
enroll here. These schools must work hard to enhance and communicate
the quality of the school and its programs to persuade that it is worth the
price. If successful at this strategy over time this school can eventually
become a Tier II school. As a short term solution this school could adopt
net tuition revenue strategies (discounting) to increase its
affordability…even while its relative prestige is still low.
57
Courtesy of Marketing Independent Schools in the 21st Century, Chapter six, “The Affordability Dilemma” by Mark Mitchell
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Institution
Enrollment Demand, Price and Revenue*
Demand
Price
High Tuition
Tuition
Tuition
Revenue
Low Tuition
(High Tuition
Revenue
LowTuition
Enrollment)
(Price X Enrollment)
Tuition Revenue
(Low Tuition, High FP Enrollment)
0
Low FP
Enrollment
Full Paying High FP
Students
Enrollment
58
Enrollment
High
Demand
Tuition
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Institution
Enrollment Demand
and Net Tuition Revenue*
Moderate
Demand
Tuition for
High Demand
School to Match
Moderate School’s
Enrollment
Low
Demand
Tuition
rate
Tuition for
Low Demand
School to Match
Moderate School’s
H
Enrollment
M
L
0
Moderate
Full Payers
Enrollment
One pricing approach….
Affordability Challenge Solutions
• Market Value: Internally and Externally
• Proactively Attend to Student Retention
• Moderate Tuition Growth
– Grow non-tuition revenue sources
– Reduce operating costs
• Use Net Tuition Revenue Accounting
– Push Enrollment Capacity
Enrollment Demand
and Net Tuition Revenue*
Tuition
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Instituition
D
Tuition
rate
Full Paying
Tuition Revenue
D
0
Enrollment
Total
Full Payers
Enrollment Demand
and Net Tuition Revenue*
Tuition
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Instituition
D
Optimal Enrollment
Tuition
rate
Full Paying
Tuition Revenue
D
0
Enrollment
Total
Full Payers
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Instituition
Enrollment Demand
and Net Tuition Revenue*
Tuition
D
Optimal Enrollment
Unfunded
student aid
Tuition
rate
Full Paying
Tuition Revenue
Net tuition
revenue
due to aid
D
Total on aid
Enrollment
0
Total
Full Payers
Total
enrolled
High
Demand
Tuition
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Institution
Enrollment Demand
and Net Tuition Revenue*
Moderate
Demand
Optimal
Enrollment
Low
Demand
Tuition
rate
Unfunded
Aid
FA Revenue
Full Pay
Revenue
H
M
L
0
Low
Full Payers
Moderate
Full Payers
High
Full Payers
Enrollment
High
Demand
Tuition
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Institution
Enrollment Demand
and Net Tuition Revenue*
Moderate
Demand
Optimal
Enrollment
Low
Demand
Tuition
rate
Full
Pay
Revenue
0
Unfunded
Unfunded
Student
Student
Aid
Aid
FA
FA
Revenue
Revenue
H
M
L
Low
Full Payers
Moderate
Full Payers
High
Full Payers
Enrollment
Tuition
All who
meet
criteria
All who
would
attend
Enrollment Demand
at stages in admission process*
Matriculating
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Institution
Unfunded
student aid
Tuition
rate
A
B
C
D1
D2
0
D3
Enrolled
Yield
Admits
Desired
Enrollment
Applications
Enrollment
67
Admission Accountability
• QUALITY and composition of Student
body: Academic, Diversity, Extracurricular.
• QUANTITY - Enrollment at optimal level
(capacity).
• REVENUE -Net Tuition Revenue.
Financial Aid is not real money...
• Financial Aid is potential revenue lost.
• Unless a school is turning away qualified full
paying students, in order to make a space for a
student receiving financial aid, there is no
revenue lost by admitting students who receive
aid.
• In fact, financial aid students are a valuable
source of revenue!
Is the glass half empty or half full?
• Net Tuition Revenue = the tuition remaining after
the marginal cost of educating that student
(receiving aid) is subtracted from tuition paid.
• Tuition = $20,000 but family only pays school
$10,000 and the additional marginal cost to
educate that child is $2,000. Net tuition revenue is
$8,000.
• So, this student could be viewed as a $10,000 loss
(traditional F/A accounting) or a $8,000 gain (net
tuition revenue accounting).
Students on Aid are a source of income,
not a cost to the school.
• Look at the tuition revenue (beyond
marginal costs) generated by students
on financial aid.
• In most schools, the revenue generated
from families on financial aid is
significant.
Cranbrook Upper School
Financial Aid Revenue as % of Total
FA
Financial Full
revenue
Aid
Paying
Total
as % of
Revenue Revenue Revenue
Total
Boarding $ 729,701 $2,857,800 $ 3,587,501 20.3%
Day
$ 430,975 $6,293,000 $ 6,723,975
Total
$1,160,676 $9,150,800 $10,311,476 11.3%
6.4%
Spending more aid is fiscally responsible...
“Capping the amount of unfunded student aid is not an
option (for schools under capacity). And yet, that is
precisely the type of move that college officials are
tempted to try, ignoring the logic of the downward
sloping demand curve. Capping unfunded student aid
at some arbitrary percentage of the expense budget,
unrelated to the demand curve, could result in lower
enrollments and a loss in net tuition revenue.”
David W. Breneman
Liberal Arts Colleges: Thriving,
Surviving or Endangered?
How do you move towards
Net Tuition Revenue accountability?
• Prepare:
1) revenue, enrollment and financial aid histories;
2) a financial analysis of the potential impact;
3) a budgeting system.
• Work to get all constituencies (Admission, Business
Manager, Head, Board) to understand concept.
Assure them that this will make admission more
financially accountable.
• Supply Head and Board with information necessary
to accept tuition revenue and let go of traditional
financial aid accounting.
Challenges of
Net Tuition Revenue Accounting
• Accurate accounting of both tuition revenue and
financial aid.
• Realistic two or three year enrollment and
financial aid projections.
• Establishing the school’s true capacity, without
increasing the fixed costs.
• Establishing the marginal cost of educating one
additional student at your school.
• Getting the Admission/Financial Aid Director,
Head, Business Manager and the Board to fully
understand the concept and ramifications of
NTRA.
Budgeting
• Spread awards across grades, don’t commit
too much aid to younger students.
• Don’t spend too much of future years’
budgets.
• Have F/A goals or limits as to how many full,
half, small, etc.... awards to be given.
• Create a system to track tuition revenue and
F/A numbers accurately.
• (Go to spreadsheet).
Affordability Challenge Solutions
• Market Value: Internally and Externally
• Proactively Attend to Student Retention
• Moderate Tuition Growth
– Grow non-tuition revenue sources
– Reduce operating costs
• Use Net Tuition Revenue Accounting
• Push Enrollment Capacity
• Consider Merit Aid
Merit Scholarships
Advantages:
• Gets talented families past “sticker shock” to apply for the
“honor” of winning a merit scholarships…vs. the “shame”
of having to ask for need based aid.
• Marketed correctly it will generate large numbers of new
applicants…many of whom would not have considered
applying to any of our schools.
• Many of the “runner-up” candidates will decide they want
to enroll, even after they do not win the scholarship.
• Will add a good number of exceptionally talented students
to our schools, thus increasing the prestige of the
independent school industry in Ohio
78
Merit Scholarships
Disadvantages:
• Could compete with need-based budget…thus setting up
competition between socio-economic diversity and
academic talent.
• Could trigger a merit aid “war” thus lowering all of our net
tuition revenues
• Could be poorly perceived by our current students when
they learn they are ineligible.
• Not applicable to some types of independent schools (LD,
elementary only, etc)
79
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Instituition
Enrollment Demand
and Net Tuition Revenue*
Tuition
D
Optimal Enrollment
Unfunded
student aid
Tuition
rate
Full Paying
Tuition Revenue
Net tuition
revenue
due to aid
D
Total on aid
Enrollment
0
Total
Full Payers
Total
enrolled
*from "Liberal Arts Colleges:
Thriving, Surviving or Endangered?":
David W. Breneman
The Brookings Instituition
Enrollment Demand
and Net Tuition Revenue*
Tuition
D
Optimal Enrollment
NEED BASED
Unfunded
student aid
Tuition
rate
Full Paying
Tuition Revenue
Net tuition
revenue
due to aid
D
MERIT
BASED
Unfunded
student aid
Total on aid
Enrollment
0
Total
Full Payers
Total
enrolled
Affordability Challenge Solutions
• Market Value: Internally and Externally
• Proactively Attend to Student Retention
• Moderate Tuition Growth
– Grow non-tuition revenue sources
– Reduce operating costs
•
•
•
•
•
Use Net Tuition Revenue Accounting
Push Enrollment Capacity
Consider Merit Aid
Market Affordability
Align Aid Distribution with Institutional Needs
83
84
Affordability Challenge Solutions
• Market Value: Internally and Externally
• Proactively Attend to Student Retention
• Moderate Tuition Growth
– Grow non-tuition revenue sources
– Reduce operating costs
•
•
•
•
•
Use Net Tuition Revenue Accounting
Push Enrollment Capacity
Consider Merit Aid
Market Affordability
Align Aid Distribution with Institutional Needs
Economic Trends and Financial Aid
22-Yr Avg Ann Chg in Aid Granted: 7.61%
91-92: Avg Aid up 13.3%
02-03: Avg Aid up 13.1%
Avg Apps up 6.5%
Key Learnings

Anticipate and plan for spending rate increase for financial aid to be
1.5 to 2 times more than normal
– Important: This does not mean 1.5 to 2 times more in dollar
amount; it means 1.5 to 2 times greater percentage increase in aid
spending over a typical year

Don’t be squeamish about the spike in financial aid you’re about to
experience
– It’s what has helped schools weather the storm in the past
– It’s a natural consequence of downturn that more people will need
more help
– In a most-likely scenario, the spike will only be necessary for a
year
Dealing With…

Job and Income Loss

– Remind families that the
application seeks a “snapshot in
time” of current situation
– Lowered values will be
considered in assessments if they
complete the application
correctly
– Work to get a projected income
statement and documentation
– Use “provisional” or semester-based
awards
– Follow up regularly for updated job
status

Unusual Expense Allowances
– View carefully case-by-case
– Allow more leeway if credit cards
used to pay normal expenses due to
income loss
– Count annualized monthly payments
as unusual expenses
Decreasing Net Worth

Restricted Access to Credit
– Not many families rely on credit
to pay ind sch tuition
– Your Tuition Solution remains
the sole player still providing K12 tuition loans
Key Features of SSS 2009-2010
•
SSS Solution Suite offers comprehensive financial aid
information
•
Leading technology for financial aid processing to make your
school run faster and smarter
•
Web-based platform (for schools and families)
•
SSS to collect your required tax and other documentation
•
SSS will scan, index, and make documents available on the web
within the application
•
SSS will capture relevant information from required documents
and present to schools for review
Web-Based Platform
•
Access SSS anywhere you can access the web
•
The site is password protected and secure
•
Applications processed all year so financial aid awards can be
made all year
•
NAIS can make any updates to the system quickly
Web-Based Applicant Management
Document Handling
•
Customize what documents you require
•
SSS will collect all documentation and indicate “complete”
files
•
All information sent to SSS is secure
• Documents are scanned within 48 hours of receipt
• Documents are kept in paper file throughout the school year then securely
shredded
• Electronic files are retained indefinitely
•
Document handling flexibility
• Family may send to SSS
• School may send to SSS
• School may scan and upload to family file (no data capture on this option)
One-Stop Document Management
Scan, Index, and View
•
SSS will scan and index all received documentation
•
You may view all documentation received from families
•
You may choose to view only the docs associated with
certain information from the PFS
•
All scanned docs will be PDF and available for printing, if
necessary
Data Capture and Professional Judgment
•
SSS will capture relevant information from required
documents and present PFS and other information side by
side
•
You have the ability to modify PFS fields from that
information while maintaining the original information
•
Real-time change to the RFC
•
View information document with a click of the mouse
Budget and Data Management
•
Calculate awards
•
Manage your financial aid budget
•
Create custom reports to add to standard report library
•
Access other NAIS data sources to analyze and plan
•
Export data to other applications
Web Portal for Parents
•
Separate parent portal that retains historical information
•
Populate new year’s form with existing information to help
parents enter current information more easily
•
One place for parents to submit all documents
•
Parents can check on the status of their documents
NAIS Demographic Center: SSS Edition
•
Data included with SSS by NAIS subscription
•
Summary Reports of Key Variables
• School age population
• Household Income
• Family Income
•
Trend and Percent Reporting
• Block Group, Zip code, City, County,
Rebuilding SSS with Schools
•
New SSS has been in active development with the NAIS school
community for three years
•
Seven pilot schools have been using the evolving beta version for
financial aid processing for three years
•
Final group of 10 schools conducting user interface testing
•
Continuous feedback gathered from schools at demonstrations
held around the country
“The new SSS offers schools increased efficiency and flexibility in processing and offers families increased ease of
transactions and security. NAIS has been very helpful through the pilot program and are ready to implement the new
SSS with training and great customer care.”
– Russ Gagarin, Director of Admissions and Financial Aid at Landon School, MD
The New SSS
The tried and true with the cutting edge new!
•
(Re)Built to Help Schools Help Families
•
Allows the same art and science approach to financial aid
awarding
• Science to determine general need
• Art to customize need based on individual situations
•
The cutting edge of financial aid processing to make your
school run faster and smarter!
•
•
•
•
•
•
web-based solutions
customized document collection
paperless offices
secure information storage and retrieval
side-by-side information comparison
SSS Solution Suite to help answer all of your financial aid questions
The End
107
108
SSS 2009 Timeline
•
May 15 –Subscription Opens
•
June thru August – SSS and Comp*Assist Online
Demonstrations in-person and via webinar
•
August – Paper PFS and Financial Aid Guide available
•
October 1 – Comp*Assist Online available to schools (customize
your experience)
•
November 1 – PFS Online available for parents
New SSS Pricing
Enrollment Cost
minus
Early Bird Discount
minus
Fee Waiver value
($50 before 9/1/09)
(5x$35=$175)
NAIS Members
Schools 175+ enrolled
Schools <175 enrolled
$250
$125
$200
$75
$25
$0
Non-NAIS Members
Schools 175+ enrolled
Schools <175 enrolled
$350
$200
$300
$150
$125
$0
Family Costs
Paper PFS
Online PFS
PFS
$42
$35
Add’l School Reports
$0
$0
Multiple Choice Quiz
When there is an exciting new project or
opportunity for your schools admission/marketing
operation what are you most likely to do?
A.
B.
C.
D.
Consider it for a little while, but decide the office
is just so swamped it will have to wait.
Work with the staff to eliminate some current
projects/tasks to make time and find money to do
this new project well.
Add this new project on top of everything else,
and hope you can get it all done and paid
for…somehow.
My office is too busy to even think about new
projects/initiatives.
Low
URGENT
High
Time
Low
IMPORTANT
High
Low
URGENT
High
Time (What we should do)
Low
IMPORTANT
High
High
Time
URGENT
Subtract
Low
Add
Low
IMPORTANT
High
“Smart organizations ignore the urgent. Smart
organizations understand that important issues are
the ones to deal with. If you focus on the important
stuff, the urgent will take care of itself.”
“The easiest thing to do is to allow the urgency of the
situation to force us to make the decisions (or take
the actions) that we'd rather not take. Why? Because
then we don't have to take responsibility for what
happens. The situation is at fault, not us.”
From “If it’s urgent, ignore it” by Seth Godin
Exercise at School 2
1.
2.
3.
List two ideas you hope to add to your
office’s operations this next year.
Now, list the items/tasks which your
office will discontinue doing to allow
enough time and/or money to
accomplish these new initiatives?
How will you (credibly) explain/justify the
discontinuation of a previously executed
task or service to your Head/Board?