Will Raising Tuition Scare Families Away?

Vol. 16 No. 6

PSN eletter vol15 no6 financialaid

When asked if increasing tuition scares away current and prospective families, many school administrators might be tempted to respond with a resounding “Yes!”

But our latest findings show that’s not necessarily the case. ISM, Measuring Success, and the National Business Officers Association (NBOA) recently collaborated on the third iteration of a study initiated in 2006 to study the impact of tuition increases on private-independent school enrollment.

The collaborators examined data from 259 schools of all types, grade levels, sizes, locations, and affiliations in North America. The findings from this study echo those found in 2006 and 2011—There is no measurable relationship between increases in tuition and subsequent changes in enrollment.

In fact, the study found quite the opposite. If a school can demonstrate increased value to students and their families through better delivery of the school’s mission, a tuition increase is seen as a worthwhile investment.

For schools on the higher and lower ends of the spectrum (more than $25,000 per year and less than $15,000 per year, respectively), increased tuition had no effect on enrollment or retention.

Mid–range school enrollment showed inconsistent outcomes, ranging from flat enrollment to 3% increases in enrollment and retention, depending on how much tuition increased. And there was no correlation between how much financial aid a school offers and the effect of tuition increases on enrollment.

There will always be outliers and your school may have experienced something different than what these results found.

But the overall trending data shows that focusing on the quality of the education provided and what the school needs to do to deliver that quality should be the primary concern of today’s private-independent school, even if that means slight tuition increases.

Read the report, Effects of Tuition Increases on Enrollment Demand, for the complete findings.

Additional ISM resources:
Effects of Tuition Increases on Enrollment Demand

Additional ISM resources for Gold members:
I&P Vol. 42 No. 6 Tuition Change and Enrollment Demand: A Replication Study

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