Tuition Rate Increases: When is the Time Right?
The recent economic downturn has educational providers wondering whether to raise tuition rates or to continue to keep them constant for the benefit of struggling parents. This issue is especially difficult since costs continue to rise and the gap of providing high quality programs versus what parents can afford to pay continues.
If your center has delayed annual tuition increases, it is a good time to begin a gradual increase, while communicating with parents that while you have been respectful of their challenges and haven’t increased recently, it has now become necessary to do so to meet rising costs while continuing excellent educational programs. In addition, although providers are hesitant to attempt tuition rate increases in an environment such as this, many are using this opportunity to review financial and operational parent policies.
Such things as registration fees, multiple child discounts, vacation policies and payment policies are often over-looked, yet can provide significant opportunities to increase revenue While using more tuition strategies to manage your business, don’t forget to look for the opportunities to be innovative and even to invest in the industry if you are able.
Watch legislative and private initiatives that will fund tuition in certain areas and adapt your programs accordingly.
Pay attention to new avenues of revenue, such as adding infant programs, collaborating with the local schools to provide on-site afterschool programs, tutoring, business collaborations, state pre-k initiatives, or accepting subsidized tuitions, etc.
Consider expanding into a geographic area that is stable and seek acquisitions of existing programs if you have the human and capital resources to do so.