In the last year, I’ve noticed during my presentations – whether to enrollment leaders or business leaders or heads or trustees – that the audience wants to linger on slides connected to financial aid and tuition. To put a finer point on it, school leaders are quickly recognizing that the cost of independent school tuition, the demographic and competitive market changes affecting what independent schools can charge, and the lack of clear financial strategy within school financial aid budgets are all ripe for exploration and new thinking.
Numerous studies, including our 2017 Ride to Independent Schools, suggest that independent school leaders must look with fresh eyes at the cost of an independent school education and the perceived value of our educational offerings, and work against negative trends. Sixty percent of prospective families surveyed in EMA’s Ride report said they’d be seeking financial aid – even those who would be classified as affluent. Further, twenty-five percent of prospective families didn’t see “much of a difference” between a private independent school and their own free public school options, suggesting that the independent school “brand” and its value is in decline in the wider K-12 landscape. And according to the latest EMA state of the industry report (coming soon!), more and more of our member schools are using “merit aid” to meet enrollment goals and gain a competitive advantage – further distancing their schools from any “need-based” financial philosophies which used to govern the majority of schools in EMA’s membership as they distributed awards and discounts to students. These new realities beg the question: Is financial aid, as we’ve known it, dead?
A New Partnership
This question kicked off a discussion with our colleagues at the National Business Officers Association (NBOA) and led our two organizations to embark on a joint initiative to understand the issues in play for our shared community. Together EMA and NBOA will examine affordability concerns of current and prospective families and put a spotlight on innovations underway at schools trying to address these challenges. Our ultimate shared goal is to help our collective memberships achieve their enrollment goals of finding and retaining mission-aligned students. Of course, we also seek to support our members as they build financially-sustainable long term plans for their institutions.
So what does this partnership look like? First, both organizations will build joint resources on these topics through 2019, with an eye to creating blended perspectives infused with both enrollment and business expertise. These resources will be housed on a microsite connected to the EMA and NBOA websites. Among the shared resources, watch for targeted “finance” episodes of EMA’s popular Enrollment Management Spectrum podcast; new webinars on the “Future of Financial Aid,” and research papers, magazine articles, and conference programming (both EMA and NBOA will feature conference panels discussing the issue). This winter, watch for a full issue of NBOA’s Net Assets magazine focused on the future of financial aid; EMA will also devote significant space in The Yield to the topic this year. NBOA and EMA will also issue a joint research paper and recommendations for the industry as we conclude our work together on the future of financial aid next fall.
We kicked off the EMA/NBOA partnership at our annual conference in September with a panel of experts discussing “The Future of Financial Aid.” Moderator Mark Mitchell, vice president at NAIS (center in photo at right), and (l-r) panelists Kila McCann, director of admission and financial aid, Fountain Valley School of Colorado, CO; Dallas Joseph, vice president of finance and operations, Baylor School, TN (and former NBOA board chair); Jennifer Hillen, NBOA vice president of professional development and business affairs; and Brian Beale, director of enrollment at Brimmer & May School, MA, gave our audience a good deal to think about on where financial aid may be headed. The following insights were shared:
- Significant Budget Item: Typically, financial aid is the second biggest line item behind salaries and benefits. Given this significant expense, how can enrollment and business leaders work together to strategize for its best use?
- Tuition Pricing: The Consumer Price Index shows that education continues to outpace all other comparison groups in rising costs. Can schools work to drive down or contain expenses in order to ensure less dependence on tuition increases in the future?
- Brand Value: Are independent schools “worth it”? Where is the evidence for return on investment for tuition dollars spent? What is the independent school brand in 2018 (and beyond)?
- Discount Demands: There has been a significant increase in the number of families requesting financial aid in recent years, including those who wouldn’t “qualify” under past need-based policies. How might school leaders address pricing pushback from those families who wish to access our education but are unwilling to pay the full price?
- Rethinking Cost and Aid: Is it time for our community of schools to rethink pricing (and discounts)? If so, what existing innovations are working in our wider community and how might all schools learn from these initiatives?
EMA recognizes that families are increasingly worried about the cost of education for their children; with many focused on saving for college tuitions, they cite concerns about affording independent schools. With these pervasive trends, will independent schools continue to see declines in lower schools as families opt out, for now, in order to save for their children’s college experiences? Given that nearly half of U.S. students (with parents at all income levels) receive “discounts” on the price of admission to top colleges and universities, will the higher education pricing trends trickle down to the independent school community? As more for-profit entities enter the K-12 space with less expensive educational offerings, it seems that the independent school community should work together to explore ways to enhance its brand value while also managing expenses and tuition increases with greater deliberation.
Affordable Financial Aid Training
Given industry service provider changes, EMA has also worked to build programming to support financial aid professionals this year. Our national director of business development (and longtime financial aid expert), Kristen Power, has created a financial aid training to provide you with on-demand webinars to enhance your team’s understanding of the complexities and issues surrounding financial aid and its use today. Learn more about EMA’s Financial Aid Webinar Series here. For one affordable price, your school can receive access for your entire team to hear from seasoned financial aid experts on myriad topics important to your financial aid deliberations.
EMA’s work with NBOA, to understand the issues in play and to explore new models, begs community involvement. We invite you to engage with us as we explore affordability, strategy, and sustainability. NBOA’s Executive Director Jeff Shields and I look forward to the dialogue ahead and to these explorations. We’re thrilled to be leaning into EMA’s conference theme, #StrongerByAssociation.
Here we go!
For now, we invite you to learn more via these resources:
Webinars: Watch webinars on the business of enrollment, the impact of the millennial mindset on financial aid strategy, and net revenue management
Resources Library: Scroll through our library of data and finance-related resources
NEW – On-Demand Webinar Series on Financial Aid: Sign up to access this series for your team.