Tuition Increases: The Elephant in the Christian School Board Room

By flipping the tuition discussion on its head, the decision becomes quite simple.

The finance leaders of SCSBC member schools meet regularly to discuss current topics of interest. Every January or February, invariably, the question is asked, “How much are other schools increasing their tuition by next year?”

When SCSBC does a financial health review of a member school and one of the recommendations is to increase tuition rates, boards will often respond with “won’t we lose students because families won’t be able to afford it?”

Neither of these questions is inherently wrong to ask. It is important that a school’s tuition rates are somewhat comparable with others in its geographic area, and that its cost structure is not out of line with similar schools. It is equally important that Christian education be financially attainable for families that desire this opportunity for their children.

But often, these questions are born from a sense of fear. . . fear that the school isn’t being stewardly enough with its tuition dollars or fear that families will leave because they can’t afford the fees. Sometimes the questions arise from a sense of pride. . . pride in being frugal, doing more with less, not becoming a school for rich people, or even pride in trusting God to provide the school’s needs.

School boards should instead flip the tuition question on its head. Rather than deciding first how much tuition should increase, and then squeezing expenses to fit that revenue, the school should start by evaluating the resources needed to deliver its mission at the desired level of excellence. What resources are required to support the needs of its students, to compensate its staff fairly, and to maintain its school facilities? Those questions should be the primary drivers of the tuition decision, with rates set at the level needed to achieve those goals. The school’s budgeting process should move the discussion in that direction before making final decisions about fee increases.

Plenty of research has been done to examine the correlation between tuition rates and enrolment. All have found there is virtually no relationship between the two. The reality is that parents who value Christian education for their children are unlikely to change that decision because of a tuition increase, especially if they can clearly see those funds are improving the outcomes for their children and supporting the retention of excellent staff. If they do not see the evidence of that value, then the enrolment decision becomes a different discussion altogether, no matter what the tuition rates are. Tuition dollars must still be spent wisely and effectively, creating a value proposition that parents will support. Alternatively, if schools underprice their tuition, it can create a perception that the educational experience they offer students is not of the quality that students deserve and parents expect.

“The reality is that parents who value Christian education for their children are unlikely to change that decision because of a tuition increase, especially if they can clearly see those funds are improving the outcomes for their children and supporting the retention of excellent staff.”

Affordability concerns are certainly valid, especially in today’s environment of high inflation, rising housing costs, and concerns about job losses due to possible recessions and trade wars. But the school board should not presume to make financial decisions for school families by assuming no one can afford a tuition increase. Most families, as noted above, will not change their enrolment decision because of this. In fact, the increased fee revenue will provide more funds to help those families who are truly in need of financial assistance. Every school board should ensure that it has a robust tuition assistance program with proper policies and procedures that direct funds to worthy families. Affordability concerns are also tempered somewhat by the ability of Canadian religious schools to issue donation receipts for the religious portion of education in accordance with regulations of the Canada Revenue Agency.

Board members are typically parents themselves, and they may bring their own biases into the tuition discussion because it affects them personally. However, boards are tasked with leading the school and thinking strategically about its financial sustainability and how it achieves its mission. A decision to keep tuition rates low next year may provide temporary relief for current families, but what does it mean two or five or ten years from now? What is the cumulative effect of those low tuition increases on future students, on staff retention, and on the condition of the school facilities? Boards must ensure that their financial planning process extends beyond the annual budget to a multi-year plan for achieving its strategic goals.

The concerns that are raised during the tuition discussion all have elements of truth and are worth talking about. Repeated excessive tuition increases are problematic and impact affordability, school communities should have empathy for those in difficult financial circumstances, and boards and administrators must ensure that programs deliver cost-effective results. But if the focus shifts away from a scarcity mindset, then the tuition decision becomes a very simple one. When schools understand what resources they need to achieve the desired outcomes for students and staff, they can deliver the school’s mission and vision with excellence while truly stewarding the blessings that God has provided to the entire school community.

Tracey Yan
SCSBC Director of Finance