How to Contain Costs of School Offerings amid the Demand for Personalization

Editor’s note: This blog is part of a series on strategic planning for financial sustainability. The previous blogs covered handling rising costs and competition, getting granular on per-student costs, and paying well for good people while keeping costs in check. We welcome your questions and comments.

One of the thorniest challenges that independent schools face is the pressure to increase personalization amid the rising costs of small classes and proliferating program options. The previous posts in this series provide guidance on how to compute the per-student cost of different offerings, including smaller academic classes, electives, athletics, and student supports.

Typically when school leaders do this math, they find that some of their offerings have a fairly high price tag. Take, for example, an athletic offering that requires a paid coach but has only a handful of students (perhaps totaling more than $800 per participant). An elective with only eight students also comes at a higher per-student cost than another class with a larger enrollment.
 
As I write this, I can almost hear school directors groan as they fear that the only way to save on costs is to eliminate the very offerings that make the school attractive to the target student population. The strategies below provide independent schools with some ideas for maintaining offerings without running in the red.
 

Strategy 1: Offset small classes with larger ones.

Low student-teacher ratios are valued in many subjects, but smaller groups may not be critical for all offerings. To afford small classes in one subject, a school might save funds with larger classes in another. Consider P.E., choir, library, theater, computers, study halls, or other offerings that might make do with more students per teacher (maybe even double or more) than the school’s norm. Perhaps larger classes are possible even in a math class with a talented teacher adept at using technology. To make the savings work, this option requires reducing total staff FTE for those offerings with larger class sizes to support the smaller offerings of critical value.
 
Surely some readers are bristling at the proposition of doubling the students with a single teacher, and it is true that something will undoubtedly be lost in the shift. The issue here is one of tradeoffs, and how each school values the different options. For some classes, the teacher workload will rise (for instance, in a math class), and offsetting that extra load with a pay increase may make good sense.
 
Many schools may not be strategic in their use of class size as an investment/savings option. One way to look at it is to recognize that size may not have the same value in every subject (or with every teacher). Parents, for instance, seem to care a lot about class size in elementary home rooms, and in core subjects, but don’t seem to blink if their child takes orchestra with 40 or more peers.
 
In fact, while parents are known for their fixation with class size, one survey found that when given a choice between class size and teacher quality, teacher quality won handily. A clear majority (73 percent) of parents would prefer a class of 27 students and a teacher from the top quartile over a class of 22 students with a randomly chosen teacher. 
 
For schools trying to do the most with limited funds, it could be worth considering uneven class sizes, even though this will undoubtedly require some creativity with the school schedule.
 

Strategy 2: Rethink frequency – parents value small sizes, but don’t question the frequency.

If small classes are a must, one way to alter the cost structure is to allow some classes to meet less frequently. A school might have a ceramics class meet twice a week, thus enabling the art teacher to double the number of courses she teaches. Even some secondary seminars might remain small by reducing class meetings to three times a week. Here again, the savings only materialize if the school can use the strategy to rely on fewer staff FTE.
 
Reducing the frequency of classes likely won’t work for all subjects, but the reduction could be paired with a learning lab for some academic subjects. (See Strategy 4 below.) For example, foreign language classes might meet three times a week and require that students spend a fourth (and maybe fifth) assigned time period in the learning lab using language software. The same strategy could work for a math class. Courses that leverage student teams might meet fewer times each week with assigned team-time elsewhere on the weekly schedule.
 

Strategy 3: Consider non-traditional providers or partnerships.

Some schools partner with local yacht clubs’ sailing teams, such that their schools practice and compete as part of the clubs’ teams. Other schools partner with lacrosse clubs, crew teams, swim programs, local theaters, and other organized activities to expand the number of school offerings without picking up the tab of running a full program. Similarly, some schools might be able to find an artist or musician who will contract to teach a single class.
 
An emerging option is to leverage partnerships that are developing between schools for academic electives. For instance, Global Online Academy (GOA) provides online courses for more than 60 GOA-member schools by tapping the faculty in these schools. Students can sign up for courses such as computer science, microeconomics, and digital photography. GOA works like a co-op in that each school can share its faculty expertise to expand the specialty options across all students. Member schools receive $7,000 for each course that’s taught by one of their faculty, and the schools pay in $500 for each student taking a GOA class.
 
If a school has a valued but under-enrolled elective, partnerships like these can help offset the costs while expanding the number of offerings for its students. Where the costs of adding a demanded course are too high, paying the incremental $500 per participating student might make more sense.
 

Strategy 4: Leverage learning labs (or other lower-cost offsets).

Strategies 2 and 3 would allow students to have some periods during the day when they aren’t in class. For some schools, giving students free periods means less learning time and more behavior problems. One alternative is to schedule students in a learning lab. A learning lab is a supervised larger class where students are expected to work on schoolwork (often on computers).
 
Interestingly, an innovative charter school in California, Rocketship, relies on a large-group learning lab for its elementary students. The lab is used throughout the school day as different groups of approximately 60 students rotate through at a time. Coupling use of the lab with specialization in the elementary level allows the school to rely on only three teachers to teach four classes. (See graphic.) The lab is staffed with a lower-cost technical position, enabling the lab to represent a cost savings.
 

 
At all grade levels, students might work on math or foreign language software (to supplement the math or foreign language class). A student taking an online class may be scheduled for one period a day in the lab to work on the class.
 

Strategy 5: Customize by allowing students to opt out of redundant requirements.

Another idea that may work in a subset of schools: Allow some students to opt out of courses that may be redundant with their outside activities.
 
Increasingly, today’s adolescents are specializing in activities outside of school to advance their skills in athletics or fine arts. Others come to school already proficient in a second language or having studied Java over the summer. Giving P.E. or dance credit to a student who performs with the city ballet company may allow that student to take one fewer class. When enough students qualify to take one fewer class, the reduced numbers may lower costs on the margins, or at least enable smaller classes for those remaining. Although this strategy is unlikely to be a big cost saver, it could be in a school’s arsenal for enabling personalization.
 
All told, the pressure for personalization amid cost constraints is unlikely to subside soon. The options here are intended as food for thought. Each school may find a way to customize differently.
 
Finally, just a reminder: My next and last blog post in this series in March will be dedicated to responding to your comments or questions on any of the posts in this series. Please feel free to raise any issues you find relevant, and I’ll attempt to respond to each one.

NAIS Resources on Cost Containment, Outsourcing, and Cost Sharing

 


15-1221-MargueriteRoza-sm.jpgMarguerite Roza is the director of Edunomics Lab and a research professor at Georgetown University. Her research focuses on quantitative policy analysis, particularly in the area of education finance. Recent research traces the effects of fiscal policies at the federal, state, and district levels for their implications on resources at school and classroom levels. Roza is author of the highly regarded education finance book, Educational Economics: Where Do School Funds Go? You can reach her at edunomics@georgetown.edu
Author
Marguerite Roza
Marguerite Roza

Marguerite Roza is the director of Edunomics Lab and a research professor at Georgetown University. Her research focuses on quantitative policy analysis, particularly in the area of education finance. Recent research traces the effects of fiscal policies at the federal, state, and district levels for their implications on resources at school and classroom levels. Roza is author of the highly regarded education finance book Educational Economics: Where Do School Funds Go? You can reach her at edunomics@georgetown.edu.

Comments

marclevinson
02/18/2016 08:58 AM
I have read this several times now and discussed the first two strategies at a FCIS workshop I presented recently.

You are correct - educational leaders will groan (I have heard them do this in person) about looking at specific costs, but this is just another very relevant data point that needs to be a factor in good decision making. In my roles as an association leader as well as an independent school trustee, I find this type of data compelling.

Our schools have done a great job for decades convincing our parents that small class size is the most important unique differentiation that we offer. Perhaps our schools can stop marketing this and start marketing and articulating the multitude of other important factors that uniquely differentiate our schools.

Great series of articles. Thank you for bringing to to the forefront of a very important question of sustainability.
Sincerely,
Marc Levinson
Executive Director, MISBO

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