Key lessons for independent school leaders about financial aid and tuition during the COVID-19 crisis

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Key lessons for independent school leaders about financial aid and tuition during the COVID-19 crisis

A conversation with higher ed financial aid optimization experts

On May 27, EAB held a webinar for independent school enrollment managers and CFOs to discuss financial aid and tuition strategies in response to COVID-19. This Q&A session provided the opportunity for our partners to ask questions of Brett Schraeder and Kathy Ruby, two principals from EAB’s Financial Aid Optimization (FAO) team. While Brett and Kathy work almost exclusively with institutions of higher education, they have both consulted with independent schools, and provided valuable advice for these uncertain times.

Below we have summarized the key takeaways from the session; to listen to the full recording of the webinar, click here.

Key Takeaway #1:  Use data to project who might need financial aid.

One of the major advantages of independent schools over higher ed institutions is that the school communities are small and enjoy strong relationships. Use this to your advantage: talk to your families, find out what people’s needs are right now, and figure out how you can help them. (We recommend using this script from St. Catherine’s School to get started.) This type of outreach will help you know who has been affected by illness or loss of income, who may need additional time to pay, and who could benefit from aid.

In addition to checking in to provide individual support, schools should use available data to project who will need aid to pay tuition. Specifically, identify which families work in different industries (e.g. hospitality, healthcare), and use publicly availability information to place families into high- and low-risk categories based on which industries are being affected by COVID. For example, many dentists are experiencing financial hardship because of the pandemic, while some in the tech industry are experiencing stability and even growth. By aggregating this data, you can anticipate changes in enrollment and aid for Fall 2020 and beyond.

Key Takeaway #2: Offer short-term aid and demonstrate flexibility to retain families.

Offering flexible solutions will allow your families the time and assistance they need to reenroll their children and will go a long way to building good will within the community.

Depending on families’ situations, offer payment flexibility or semester by semester aid. One example we’ve seen in higher ed is Davidson College, which is providing a deferred payment option for fall 2020 so that students and their families can postpone paying part or all tuition fees for up to a full year. While this is certainly not an option for every school, it demonstrates the type of flexibility institutions are affording their families during these challenging times.

In the independent school world, Mary Institute and Saint Louis Country Day School (MICDS) put together a series of emergency tuition relief measures for the 2020-21 school year, which include a tuition credit, access to a crisis relief fund, tuition insurance, and payment plans. A list of FAQs related to these relief measures can be found by scrolling to the bottom of this page on MICDS’ school website.

Key Takeaway #3:  If you are considering making tuition adjustments, think about their long-term impact.

One of the biggest questions that the FAO team has received from colleges and universities is about whether or not to adjust tuition next year given that school will likely look different. While there is no consensus yet, so far, there are two general approaches we have seen:

  1. One is that schools are tallying up how much all those non-academic components of the college experience cost and then offering a tuition credit or grant to offset the fact that students will not receive these services. Most schools are trying to avoid this approach as much as possible, as quantifying all of these aspects of college life could lead to push back down the line, not to mention that credits or discounts are not financially feasible for most institutions.
  2. Alternatively, colleges are charging the same amount, but focusing on identifying and developing features that students will have access to, even if they no longer have access to on-campus facilities. For independent schools, this can include new services, such as personalized wellness plans focused on staying healthy at home, or replacement services, such as online fitness classes instead of in-person after-school sports. This is a much more optimistic approach to take, as it focuses on COVID-19 as a short-term problem and continues to promote the holistic value of the education experience being offered.

Bottom line: if your institution does decide to offer students and families a tuition break, do so with grants, rather than a tuition reduction or reset, which has long-term implications for institutions. In the COVID-19 world, the general feeling is that grants will be much more effective, because you can apply them semester by semester, while holding the price constant so as not to lose revenue long-term.

Another consideration is whether to offer such grants to families that are already receiving a great deal of aid. Generally, it is preferable to provide the grant to everyone, though it comes down to whether schools can afford to do so. For some schools, a pro-rated grant may be a better option.

Key Takeaway #4: Remind students and families of the value of independent schools.

COVID is not going to last forever, and eventually, things will return to normal. Continue to remind families of the mission of your school and the value of the community you offer, even if it has temporarily moved online. Of course, this will be easier to do with families whose children will be attending your school longer-term than those who only have a year left of school or whose children are very young and new to the community. But no matter a student’s age, take steps to remind families of the value of your school by connecting them with the faculty and staff members they are closest with; ask faculty and staff to reach out and maintain the relationships to students with whom they have connections, which demonstrates value and is a major differentiator from alternative educational settings.

Key Takeaway #5: Be transparent about your decision-making and communicate, communicate, communicate.

No matter how you decide to approach programming, tuition, or financial aid next year, remember that communicating the reasons behind your decision-making is paramount. For example, if you are making no adjustments to tuition next year, explain why that is. Are you redirecting funds from in-person experiences to virtual? Are you investing more in the online learning experience by training teachers and upgrading your technology? Be transparent about these decisions, share information that is clear and concrete, and continue to reiterate your mission and value to your parents and students.

To ensure that your school’s website contains an appropriate level of information about COVID-19, we recommend completing this self-audit.

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