It’s a common question: Should we offer sibling discounts to families who send more than one of their children to our school?
Sibling discounts are one type of “category discount,” a discount that is automatically given if an enrolling student falls into a predetermined group. These types of discounts also include tuition remission and full-pay discounts.
There are many competing viewpoints on category discounts. Some schools are highly in favor, citing that they’ve always given certain category discounts, such as those for siblings or for children of faculty or staff members. They also look to competing schools in the community. If the competition offers category discounts, they assume their school should as well.
Others are largely opposed, highlighting that an automatic discount doesn’t account for the financial situation of each individual family. If, for instance, more affluent families are automatically given discounts, this pulls from the overall financial aid budget. This could leave other students who may truly need assistance unable to attend because there isn’t enough aid to go around.
ISM cautions against category discounts. Offering an automatic discount to a family that doesn’t require assistance necessitates hiking tuition levels for others to “charge what it costs.”
Instead, use a discount strategy that is accessible to every student and is mission-appropriate. A need-based discount program assesses every applicant equally and meets—but does not exceed—demonstrated need.
Enrollment management is a powerful tool in building the overall value perception of your school. A school’s discount program is part of that strategy. Building value for the tuition you charge is a complex equation involving perceptions and is a process that school administrators must manage. Category discounts reduce the dollars your school receives, decreasing income and the overall impression of your school.
If you currently offer category discounts, implementing a change of this extent cannot happen overnight. If a strategic planning retreat is imminent, plan to discuss your discount policy. If you decide to change your strategy, discuss how it will be communicated and any financial ramifications.
Eliminating automatic discounts is a bold step in taking charge of your school’s operating expenses. Consider how such a change will impact your community and if it’s in line with your school’s mission.
Additional ISM Resources:
The Source for Advancement Vol. 13 No. 6 Automatic Sibling Discounts: The Conversation Continues
The Source for Trustees Vol. 15 No. 7 Board Policy on Financial Aid
Additional Resources for ISM Members:
I&P Vol. 38 No. 11 Tuition Discounts and Your School's Sustainability
I&P Vol. 27 No. 7 Stability Markers and Tuition Remission
