On Thursday, inflation rose to a year-to-year rate of 7.9% – the highest rate in 4 decades. In the South, the rate was 8.4% and 8% in the Midwest. Nine out of 10 Americans are concerned about inflation.
Inflation on big-ticket necessities like gas (25.6%), electricity (10.9%), food (7.9%), rent (16.5%), and house prices (18.8%) are adding hundreds of dollars of expenses each month to the average American.
As a Christian school Administrator, should you be worried? Of course, you should.
While important, a private education remains a discretionary purchase for many of your parents. The expenditures that are most impacting parents are necessities.
Our research suggests that, for the average Christian school, about half have enough income to weather the storm. However, harder economic times do cause these families to evaluate their spending priorities, which actually worked to the benefit of private Christian schools in the 2008 recession.
Between 25 – 40% of the average Christian school’s parents will be struggling to keep up with all the extra spending and paying tuition at your school. Some will “hit the wall” and will only be able to continue attending with increased financial aid from you.
For either group, the perceived quality of your program versus free alternatives will be crucial. All of us know that COVID-19 has been a disaster for public schools and, frankly, a gift to private schools. But is the quality of your school high enough for your parents to stay, even when the math gets harder?
How Christian Schools Should Respond to Inflation
I was working directly with Christian schools in the 2008 mortgage fiasco, and vividly recall the extraordinary inflation of the late 70s. Here is my advice:
Yes, really. If you get behind now on tuition rates now, it will be much harder to catch up in the next few years. Raising tuition allows you to keep up with teacher salaries and increase need-based financial aid. Of course, be intentional and thoughtful about this change and the way you communicate it to parents. (If you’re not sure if your parents think your school is worth the money, consider taking a Christian School Survey. You don’t want to make this decision blind.)
Stop giving automatic discounts.
The case for giving financial aid away through automatic discounts is much weaker when inflation rises. Some parents really need assistance during times like this. Others really don’t. Giving away automatic discounts simply ensures there is less help available for those who need it most.
Don’t let leads slip away.
You can’t afford to burn through leads. People cannot fall through the cracks. There is a distinct possibility that enrolled and paid families may still walk away if inflation continues at this level. Don’t burn through their replacements.
Build your wait list.
Expect more surprise withdrawals this year. If classes are full, you need ready-to-go backups in waiting. To ensure these back-ups are viable and committed, people on the waiting list should go through the enrollment process, and pay a (refundable) enrollment fee.
Differentiate. Differentiate. Differentiate.
And while you’re at it, be sure to differentiate. Now more than ever, parents must see how you are distinct from free alternatives. If you don’t have a Christian Character page proudly displayed on your website, why not? That’s the one aspect of your school that free public and charter schools will never do well.
I recently spoke to a school that lost over 20% of their students when public schools went back to maskless / in-class. It is dangerous to assume that your academics are so superior that parents will naturally choose to stay – in these economic times.
Don’t risk a Fall surprise.
You need to know precisely where you stand with parents, students, and faculty. We can help.
Our Christian School Survey — which just got a massive upgrade — will help you get a pulse and make better decisions for the upcoming year. For as little as $995, you can get priceless insights that will help you retain more students, get more leads, differentiate effectively, and become or remain financially healthy.
You can order on our website or call. We’re happy to offer a free consultation and give you our best wisdom — whether you ultimately choose to work with us or not.