Means Based Tuition: A different way to think about private school tuition
Thinking creatively about solving a big problem requires in various mixes- risk, creativity, ignoring the status quo, asking people to do (or at least accept) things differently- all driven by the ‘we have a very big problem’ to solve
The risk though is that in working to find a solution to the problem, you’ll end up with lots of dead-end ideas before arriving at a practical solution- of which some of the early thinking may, or may not, be a part.
R. Scott Asen, Groton School alumnus, puts himself on the line regarding high private school tuition in an editorial penned for the New York Times- “Is Private School Not Expensive Enough?”
Asen’s got a great background from which to speak on the subject- Groton alumnus, former trustee, ten years on the trustee development committee. He’s raised and spent money.
Asen does exactly what I’d like to see more boarding and private school trustees do- address $40-50,000 (and continually growing) tuitions.
Of the current private and boarding school tuition state, Asen writes:
“But the development model is beginning to fray. Cost growth has consistently outstripped revenue growth year after year, for decades. At private day schools today, tuition receipts often cover only 70 to 80 percent of costs, while at boarding schools it is not unusual for tuition to cover 50 percent or less of actual costs.
For 10 years, I headed the development committee of the board of trustees at Groton School, a secondary boarding school in Massachusetts, and ran two major capital campaigns there. I can attest that expenses have so far outstripped revenues that no amount of cost-cutting at such schools, healthy as that may be, can come close to solving the problem. We need to also look in the revenue side for solutions….
…This brings us to a troubling conclusion: To the extent that any family with the wherewithal is paying less than the full cost of the product it is buying through combined tuition payments and donations, that family is effectively being subsidized by other current and past donors. Not only is this ethically unsupportable, but ultimately, it is also financially unworkable.”(NYT)
Asen proposes turning need based financial aid inside out. Creating what he terms a “means based” tuition program.
“My proposal: Supplement the traditional development model with a new pricing model. During the admissions process, along with quoting the stated tuition, the school should inform all families of the real costs of operation on a per-student basis and, further, tell them that they will be expected to fill as much of the gap between tuition and cost as they are able with a donation. To determine this number, the same level of financial disclosure currently asked of financial-aid applicants will be asked of them, and a means-testing exercise will be used to determine capability. Any family not willing to provide such disclosure would simply be told that the school expected the full gap to be met with a donation.
It is commonplace today for schools either to claim a “need blind” admissions policy or to aspire to one. I recommend replacing the term “need blind” with “means based.”(NYT)
Wow that’s interesting.
Everyone from the wealthiest application families on down will be required to fully disclose their financial status with families of greater means being asked to make additional payment.
I like the risk behind the thinking. But, I think Asen’s proposal fuels the conversation more than it provides a workable solution.
Some issues I see:
- I like the idea of looking at the revenue side of the equation. But, I think the expense side has to be brought under control.
- I don’t see well off families- many of whom have discretion and privacy in their DNA- willing providing financial information to a boarding or private school as a default piece of the application unless every school starts requiring it without exception.
- I also don’t think families of means can be willingly pushed into paying more than sticker price.
- Spending five percent of endowment each year could require spending outside of the standard endowment spending equation that I know. Normally, when the endowment doesn’t grow, spending from it doesn’t grow.
- Then, there’s the real world for most schools. Asen is really talking about a very few, very competitive, well off/endowed private schools with plenty of competition for each seat. Most schools aren’t as competitive as those in Ansen’s world and must work very hard to fill beds/seats. Competitiveness is an aura.
I’m also not sure exactly where I stand on Asen’s assertion that the current model is “ethically unsupportable.”(NYT)
I love Asen’s desire to “level the playing field.”(NYT) But I’m not sure it’s applicable to smaller, tuition driven boarding and day schools that don’t have applicants lined up out the door.