How to Implement Indexed Tuition at Your Independent School
This implementation guide from the Independent School Executive Forum contains an overview of indexed tuition models for K-12 institutions. The guide also outlines key considerations and milestones in making a change from a traditional financial aid model. With the support of your head of school, use this tool with your admissions and business teams to identify how indexed tuition can help you meet your school’s unique enrollment and mission-oriented goals. Then establish key program elements, get internal buy-in, and create a communications plan for prospective families.
Why indexed tuition?
Indexed tuition is a model that tailors tuition to each family’s unique financial situation, allowing schools to offer tuition at the level that each family can afford.
In traditional financial aid models, schools discount by offering “aid” to the families that apply. In contrast, an indexed tuition model frames the conversation around having families contribute what they can afford. The result is that the emphasis is put on each family’s contribution, rather than the gap in what they cannot pay. Indexed tuition models prioritize transparency and communication around pricing and affordability, which helps attract families who have not traditionally considered independent schools and those who may not view themselves as qualifying for financial aid.
As public-school districts around the country struggle to effectively shift to virtual instruction, families are looking for alternative options for their children. Given their successful transition to remote learning, independent schools are well positioned to capitalize on newfound interest from public-school families who may not have previously considered them as an option. Indexed tuition emphasizes your school’s willingness to work with each family’s unique financial circumstances, helping attract often elusive middle-class families.
Key considerations and first steps for moving to an indexed tuition model
To begin, create a task force of key internal stakeholders to design the model and plan your communication. Indexed tuition task forces often include the head of school, director of admissions/financial aid, director of marketing, and a member of the business office. This group will be charged with thinking through questions on tuition, financial aid, and the school’s enrollment goals.
Once you have created a task force, work together to identify your primary goals for moving to an indexed tuition model. While these models offer a variety of benefits, it’s important that you begin this process by selecting your specific driving motivator. Your primary goals should drive what you name your program. From “indexed” to “tailored” to “flexible” tuition, each program carries a more rigid or fluid connotation. Consider how current and prospective families will interpret this name—does it align with your goals?
There are many logistical details to consider when moving to an indexed tuition model, but the following four are particularly important:
Who will participate in your tailored tuition committee? If your current financial aid model does not have a committee to determine aid based on a third-party report and additional considerations, you will need to create one. Typically, these committees include senior members of the business office (e.g. CFO/Director of Finance) and the admissions office (e.g. Director of Enrollment Management). In some cases, schools designate a staff member to serve as a parent advocate on this committee.
What additional elements will the indexed tuition committee consider? While third parties account for many aspects of a family’s financial situation, you will need to identify the additional considerations for your tuition committee to review (e.g. saving for college, care of an elderly relative, the percent of family’s discretionary income that should go towards tuition within your specific market, etc.). Remember that in an indexed tuition model, these considerations are typically shared with families in a transparent manner.
Will there be an expected contribution, or base-level required payment, from all families? Some institutions require a base contribution from all families. For some, this is a financial sustainability requirement. For others, it is a commitment that all families are prioritizing their child’s education at the level that they can afford. This is not required, and not all schools with an indexed tuition model implement it.
Will your tuition model vary by grade or division? For some institutions, indexed tuition programs vary based on grade or division. This could be a result of underlying models (e.g. a cap on potential aid offered in the lower school) or enrollment goals (e.g. heightened focus on middle school enrollment). You should clarify this information early so that you can adjust your language accordingly.
How to get key community stakeholders on board with indexed tuition
To ensure the success of your new indexed tuition model, you will need to prioritize community education. A commitment to parent, board, and alumni education may be time-consuming, but it’s a critical piece of the transition. These internal stakeholders will each have their own set of concerns and motivators, so taking the time up front to share why you are making this change, how it will impact your school, and what challenges and benefits lie ahead will help to mitigate future complications. Some of these initiatives will need to happen before the program’s introduction, while others should happen in tandem.
Communicate information about your new tuition model with prospects
Once you have established your indexed tuition model’s approach and secured the necessary buy in from internal stakeholders, it’s time to market your new program to prospective families. Over the last decade, prospective families have increasingly relied on stealth shopping in their admissions process, looking online as a first source of information about independent schools. As a result, it is critical to make information about your new tuition model easily accessible and readily available to prospective families on your website. This can be done through a designated landing page or on your existing tuition page.
The introduction to indexed tuition on your website should clearly state its connection to your school’s mission. From equity and inclusion to educational access, school leaders should directly outline how this new approach to tuition helps the school reach its goals and fulfill its mission. Include informational videos or a frequently asked question section directly on your website to answer questions from prospective families who may be new to the independent school community or unfamiliar with tuition pricing. Making tuition more approachable and easier to understand is a key part of this move to an indexed tuition model.
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