will this upward spiral ever end? tackling the affordability issue with increasing pressures on...
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Will This Upward Spiral Ever End?Tackling the Affordability Issue
With increasing pressures on operating budgets on the one hand, continued economic uncertainty, unemployment, and family financial pressures on the other, in the face of an alternative, affordable public school education option, can independent schools continue to increase tuition at the current rates?
Spring Business Conference –Wednesday, April 30, 2014
Elizabeth JickZions First National Bank
Jim SkrumbisSierra Canyon School
Moderator:
Panelists: Carolyn FlammeySSDS of Greater Boston, Inc.
Timothy ParsonBeaver Country Day School
Bernice BradinLesley University
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Framing the Dilemma
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Tuition levels are steadily rising - - with no end in sight!
Educational institutions today face a BIG problem…
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The Problem for Independent Schools:
Total Operating Costs continue to rise
• Salaries/Benefits
• Health Care/Insurance
• New Programs
• Capital Expenditures
• Deferred Maintenance
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The Theoretical Solutions:
These costs can be covered through a combination of:
• Raising Tuition Levels
• Fundraising/Development Efforts
• Increasing Endowment Spending
• Reducing Other Expenses
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Average Annual Increase Over Last 10 Years:
Average Annual Tuition - - Traditional Day Students
*Data provided by AISNE and NAIS.
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 $-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
AISNE NAIS
AISNE: 5.28% NAIS: 4.32%
CPI: 2.36%
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Full Paying Families
Full Paying “Middle Tier”
Families
Financial Aid Families
30% 30% 40%
Have
Get
Who is Paying the Tuition?
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Independent School Average Tuition Levels:
2003-04 2012-13 % Increase
AISNE Independent Schools $ 17,450 $ 27,700 59%
NAIS Independent Schools $ 14,132 $ 20,612 46%
Public School Tuition $ - $ - N/A
*Data provided by AISNE and NAIS.
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What Are The Key Financial Drivers Other Than Tuition Levels?
Revenues Expenses
• Number of Students
• Fundraising
• Endowment Draws
• New Income Sources
• % Budget Allocated for FA
• Operating/New Programs
• Capital Expenditures
• Program Expenses
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More Aggressive Approaches to Increasing Tuition Levels
Proactive Marketing to New Families
Launching Capital Campaigns
Identifying Facility Rental Opportunities
Outsourcing Services to Reduce Overhead
Eliminating Operating Inefficiencies
Postponing Projects/Cap Ex/Reserve Allocations
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“The world we have made as a result of the level of thinking we have done thus far creates problems we cannot solve at the same level of thinking at which we created them.”
“A new type of thinking is essential if mankind is to survive and move to higher levels.”
- Albert Einstein11
Presented by:
Carolyn Flammey
Director of Finance & Operations
Solomon Schechter Day School of Greater Boston
Solomon Schechter Day School of Greater Boston
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Founded in 1961
Located in Newton, MA
Nursery School through 8th Grade
Co-Ed Conservative Jewish Day School
SSDS of Greater Boston
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2014 Enrollment: 508 2014 Budget:
$13,000,000 2014 Tuition: $24,400 FA % of Tuition Revenue: 26%
SSDS of Greater Boston
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In June 2009, Schechter’s major feeder preschool closed
At risk:
$250,000 rental income
9-12 kindergarten students
Vacant rental property
The Problem
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Market research suggested interest in High quality preschool
Judaic and Hebrew curriculum
Full day
Starting at 15 months
Parents from former preschool and current SSDS parents also strongly in favor
The Research
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Support of Board and administration
Financial risk Start up costs
Loss of rental income
Bandwidth
Community reaction Feeder schools
Synagogues
Considerations
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Kindergarten feeder vs. income maximization
Governance
Integration with SSDS
Admission policies
Financial aid
Curriculum
Decisions
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Opened September, 2011
Full preschool enrollment
Strong kindergarten feeder
Generates annual surplus (though less than previous rental income)
Feeder preschool relations improving slowly
Results
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Presented by:
Timothy Parson
Director of Finance and Operations
Beaver Country Day School
Beaver Country Day School
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Founded in 1920 (as All–Girls School)
Located in Chestnut Hill, MA
Grades 6th through 12th Grade
Co-Ed Progressive Day School
Beaver Country Day School
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2014 Enrollment: 458 2014 Budget:
$19,700,000 2014 Tuition: $39,950 FA % of Tuition Revenue: 19.7%
Beaver Country Day School
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Background: Fall, 2009
School
•Financially solid•425 students; campus at capacity•Wants to pursue more hands-on project-based learning
NuVu
•MIT graduate student venture exploring “studio” learning model•Limited financial resources•Looking for secondary school to pilot with
Beaver – NuVu (MIT) Partnership
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Winter 2009-10: Board and internal discussion
Spring 2010: Pilot with 20 seniors in space rented from MIT Media lab decision to do full-year for FY11 made in late spring
Concerns: Integration with curriculum, cost, logistics
Some fundraising to blunt initial costs
“Make glorious mistakes!”
Start-up Phase
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Where We Are Now
•NuVu is in its own rented space in Central Square
•Changing array of guest “inspirers” lead studios on different topics
•20 Beaver students (or more) per term go to NuVu by bus each day
•Some students from other schools also attend
•Covered by school tuition for Beaver Students (we pay NuVu a fee per student)
•Beaver enrollment is 25 students higher
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Benefits
•Huge programmatic success – changes to curriculum, school facilities & mindset
•Has bolstered Admissions demand
•College list more innovative, tech-y – Stanford, Carnegie Mellon
•And has boosted bottom line! (enabling more internal funding of projects)
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Presented by:
Jim Skrumbis
Head of School
Sierra Canyon School
Sierra Canyon School
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Founded in 1978 (as For-Profit School)
Located in Chatsworth, CA
Grades Kindergarten through 12th Grade In 2006, converted to a Non-Profit and added a High
School
Co-Ed College Preparatory School
Sierra Canyon School
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2014 Enrollment: 990 2014 Budget: $31,800,000 2014 Tuition: $29,400 FA % of Tuition Revenue: 20%
Sierra Canyon School
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Presented by:
Bernice Bradin
Vice President and Chief Financial Officer
Lesley University
Lesley University
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Founded in 1909 (as All-Female College)
Located in Cambridge and Boston, MA
Co-Ed University with Graduate Programs Specializes in teacher education, psychology, and the arts
Lesley University
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2014 Enrollment: 5,195 2014 Budget: $118,535,000 2014 Tuition: $32,000 FA % of Tuition Revenue: 15% (40% for under graduate
students)
Lesley University
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Budget must always be balanced with a small surplus
Graduate schools vs. Undergraduate schools
Declining enrollment trends
Steps to reverse trends
Lesley University
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Four distinct schools serving unique markets1. LUCLAS undergrad -- College of Arts and Sciences
Was all female until 2005; now 20% male; enrollments up
2. LUCAD undergrad and grad – College of Art and DesignMerged with LC in 1998; enrollments down
3. GSOE – grad – School of Education For 20 years had a near monopoly on National cohort model
added hybrid/low residencies/on-line; enrollments down
4. GSASS --grad school of Arts & Social Sciences Counseling Psych and Expressive Therapies
Israel Program phased out by government; other enrollments up
5. Threshold Program –non-degree for young adults with learning disabilities;
Enrollments stable. Given nature of program, cannot grow
Lesley University
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Steps to reverse trends of declining enrollments and lower revenue
• Branding study
• Identify causes
• Revamped website
• Build on strengths
• Marketing and Advertising Campaign
• Expense reductions
• Cabinet Review Board for vacancy reviews
• Systematic program reviews to determine if program should be sunset
• Faculty retirement programs
Lesley University
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Undergrads
• Tuition reset—align price with what paid
• Urban Scholars Initiative
• Partnerships with Community Colleges
• 2+2
• 3 year degree
• Retention focus
• Addition of majors
• New Art Center in Porter Square
• Added internships to LUCAD
• Engaged 3rd party to market on-line programs and recruit students
Lesley University
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Graduate Programs
• GSOE• On-line marketing• Certificates and professional development• Sunsetting of low enrollment programs
• GSASS• International programs like Guyana – intensive low residences• New programs in areas like Mindfulness• Revamped Intercultural into International Education
Lesley University
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Results
• Tuition reset – too soon to know, but inquires have been up
• Hybrid programs are a huge success at grad level
• New Art Center still under construction
• In CLAS, student numbers have stabilized
Lesley University
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Summary
SSDS of Greater Boston• Replaced lost revenues• Established its own feeder school• Increased enrollment
Beaver Country Day School• Created innovative program withMIT• Accommodated 25 additional students• Increased revenues
Sierra Canyon• Increased enrollment• Created a more diverse student body• Identified new revenue stream
Lesley University• Engaged marketing firm for online recruiting • Eliminated operational inefficiencies• Enrollment - - Stay Tuned!
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All Four Pioneering Institutions:
• Faced the affordability problem in varying degrees
• Thought creatively and BIG• Took calculated risks over approximately two years
• Added extra costs to implement new programs
• Through patience and perseverance, they succeeded to:
Identify new, non-traditional revenue sources
Enhance their reputations through their entrepreneurial visions
Alleviate a portion of the affordability burden
Summary Conclusions
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Will This Upward Spiral Ever End?Tackling the Affordability Issue
With increasing pressures on operating budgets on the one hand, continued economic uncertainty, unemployment, and family financial pressures on the other, in the face of an alternative, affordable public school education option, can independent schools continue to increase tuition at the current rates?
Spring Business Conference –Wednesday, April 30, 2014
Elizabeth JickZions First National Bank
Jim SkrumbisSierra Canyon School
Moderator:
Panelists: Carolyn FlammeySSDS of Greater Boston, Inc.
Timothy ParsonBeaver Country Day School
Bernice BradinLesley University
43