To raise revenue, raise prices.
That may seem idiotically tautological, but it merits emphasis because we in Catholic schools often discount things that our families go right out and pay a higher price for elsewhere. To begin with, our tuition is generally is too low. Consider the following:
For sure, we are fortunate to receive stipends from the parish and diocese to add to these tuition amounts, but the net revenue per child in our schools is still dramatically lower than our private school competitors and still much less than what public schools receive through taxes.
I am not advocating that we try to mimic private school costs! But how can we compete if they are charging, as a national average, five times what our elementary schools are charging and twice what our secondary schools are charging? I don't think we can compete-- not, at least, over the long haul. We must narrow the gap.
Furthermore, from a marketing perspective, we no longer benefit from being the lowest tuitions in town—people associate cost with quality. What would we think about our doctor's credentials if we found out he was charging one-fifth what the other doctors around town charged? If we position ourselves in the market as the "K-Mart" of educational options, we're wasting whatever money we're spending on marketing to improve our public image. I think we’re going to have to adopt more of a college model, raising our prices rather aggressively but also funding our financial aid programs equally aggressively, and take away the stigma in applying for financial aid the same way that the colleges have done. Over 80% of those in college now receive some form of financial aid.
Look at second and third child discount rates. Many of us give half-tuition and two-thirds tuition off. Too much! If a large Catholic family struggles to pay tuitions, better to encourage them to apply for financial aid than to give an automatic tuition discount to the families who can afford to pay more. In my previous K-12 Catholic school, we gave a $1,000 discount for each additional child; in my current school, $500.
Also, look at fee structures. Many Catholic schools treat their registration fees as down payments for next year’s tuition or deposits that will be refunded upon graduation. I would advocate that you lower the registration or deposit, but make it an annual fee that is added revenue. Most of our private school competitors do it this way.
Also consider raising prices for concession drinks, textbooks, gates to athletic games, cafeteria costs, the cost of school decals and spirit-wear to mirror market rates elsewhere. Our families don’t have to buy these things from us.
If all of this makes you feel a little queasy, it shouldn't. We're not raising prices to increase profits or pad our pockets! Every extra dollar we make should go to paying our woefully underpaid teachers and staff. We must, in the words of Scripture, "be as wise as serpents and as gentle as doves." Or, in the words of business, "where there is no margin, there is no mission."
That may seem idiotically tautological, but it merits emphasis because we in Catholic schools often discount things that our families go right out and pay a higher price for elsewhere. To begin with, our tuition is generally is too low. Consider the following:
- In 2012, NAIS independent schools charged an average of $18,212 tuition for elementary schools and $22,700 for secondary day schools (nais.org).
- The average per pupil costs in 2012 for public education, across all grades, is $10,652 (ncea.org)
- In that same year, Catholic schools charged an average of $3,673 tuition for elementary schools and $9,622 for secondary schools (ncea.org).
For sure, we are fortunate to receive stipends from the parish and diocese to add to these tuition amounts, but the net revenue per child in our schools is still dramatically lower than our private school competitors and still much less than what public schools receive through taxes.
I am not advocating that we try to mimic private school costs! But how can we compete if they are charging, as a national average, five times what our elementary schools are charging and twice what our secondary schools are charging? I don't think we can compete-- not, at least, over the long haul. We must narrow the gap.
Furthermore, from a marketing perspective, we no longer benefit from being the lowest tuitions in town—people associate cost with quality. What would we think about our doctor's credentials if we found out he was charging one-fifth what the other doctors around town charged? If we position ourselves in the market as the "K-Mart" of educational options, we're wasting whatever money we're spending on marketing to improve our public image. I think we’re going to have to adopt more of a college model, raising our prices rather aggressively but also funding our financial aid programs equally aggressively, and take away the stigma in applying for financial aid the same way that the colleges have done. Over 80% of those in college now receive some form of financial aid.
Look at second and third child discount rates. Many of us give half-tuition and two-thirds tuition off. Too much! If a large Catholic family struggles to pay tuitions, better to encourage them to apply for financial aid than to give an automatic tuition discount to the families who can afford to pay more. In my previous K-12 Catholic school, we gave a $1,000 discount for each additional child; in my current school, $500.
Also, look at fee structures. Many Catholic schools treat their registration fees as down payments for next year’s tuition or deposits that will be refunded upon graduation. I would advocate that you lower the registration or deposit, but make it an annual fee that is added revenue. Most of our private school competitors do it this way.
Also consider raising prices for concession drinks, textbooks, gates to athletic games, cafeteria costs, the cost of school decals and spirit-wear to mirror market rates elsewhere. Our families don’t have to buy these things from us.
If all of this makes you feel a little queasy, it shouldn't. We're not raising prices to increase profits or pad our pockets! Every extra dollar we make should go to paying our woefully underpaid teachers and staff. We must, in the words of Scripture, "be as wise as serpents and as gentle as doves." Or, in the words of business, "where there is no margin, there is no mission."
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