NAIS - Rethinking Tuition Resets for Sustainability

This article appeared as "Starting Again" in the Winter 2025 issue of Independent School.

In December 2018, when Kevin Folan was interviewing for the head of school position at Providence Country Day School (RI), the board treasurer asked his opinion about tuition resets in the context of a bigger and detailed conversation about affordability. He tried to read the room, be as diplomatic as possible, and give the “right” answer without committing one way or the other.

He had read the industry research about this strategy, which essentially lowers a school’s annual tuition to increase the number of families who can afford the school, and knew the prevailing opinion—that tuition resets don’t work.

Folan didn’t think about that conversation much more until July 2019, when, as the new head of school at Providence Country Day School (PCD) he was first asked, “How much does it cost to attend your school?” He struggled to get the words out. He felt his cheeks turning red, he had a growing lump in his throat, and it suddenly felt very hot in his air-conditioned office. “Forty thousand dollars. Tuition for the upcoming school year is $40,000.” Given the difficulty he had in answering that very basic question, and the fact that PCD had declining enrollment, a substantial discount rate, and a very competitive market, he knew PCD had to do something different, perhaps even drastic.

Optimizing expenses or enhancing programs could provide some of the change PCD was looking for, but reflecting on the treasurer’s poignant question during his interview and the school’s long-term sustainability, Folan thought a tuition reset might be worth exploring. He began to take a closer look at how it would work.

Ready, Set, Reset

Tuition resets take a lot of time to explore and implement, and they don’t all have happy endings. The general thinking and research around tuition resets is that they don’t work. We get the instinctive reaction—lowering tuition could devalue a school’s market position and create uncertainty among prospective parents. After all, when families see a drop in price without any other change, it can seem like the school is simply a less valuable choice compared with the competition. There haven’t been a lot of schools doing this work because of that, but we’ve seen how this pricing strategy can make more sustainable schools.

For nearly a decade, and before Folan took the helm at PCD, the school had considered a tuition reset because of enrollment and an increasing tuition discount rate. But it hadn’t gotten enough momentum. To make a long-term strategic shift, the school would need to add value through the launch of new programs. Under Folan’s leadership, and after seven months of research, financial modeling, and brand analysis and positioning, PCD decided to reset its tuition by 36% in 2021–2022. By fall 2024, it had doubled enrollment from 196 students in 2019 to 390.

PCD is not alone in this success. In 2023–2024, Bancroft School (MA) reset its tuition to 2017–2018 levels, reducing its tuition by 15% and seeing a 10% jump in enrollment. Soundview School (WA), which reset its tuition in 2019–2020 by 30%, experienced an 85% increase in enrollment since implementing a lower tuition price.

In some cases, the schools exhausted other options for what a school needed to stay sustainable before implementing a reset. They made structural changes, such as right-sizing the faculty and staff, consolidating the campus, or adding another division to the school. All the while, schools were doing their due diligence to ask the questions that bring greater transparency to the true cost of education and a more accurate sense of what families are actually paying.

Essential Questions

Throughout this process, it’s important for schools to assess resources (financial, personnel, and external expertise) and assign roles with a clear, structured timeline with key milestones from market analysis to competitive research, financial modeling, and marketing and communications. It’s important to know everyone’s strengths—particularly in key project areas. When there are gaps, schools can plan and budget for consultants.

There’s no one way to roll out a tuition reset, but these schools show some common thinking about what schools need to consider on the path to a tuition reset. Schools need to ask essential questions that will guide them in determining whether this strategy can work for their school and how to move forward.

What’s the Problem?

The most important question school leadership needs to answer: What problem are we trying to solve? Understanding the root cause—whether an enrollment challenge, program viability, or pricing strategy—is the first step to setting a school on the right path.

If a school determines that its enrollment challenges are related to price, a reset can help increase the number of families who can afford the school as long as it’s part of a larger strategy to drive value and differentiate in the market. To determine that, schools need to go deep into market research.

At PCD, our first step in diagnosing the problem was to do this research and examine our target families’ demographic and economic profiles. We asked, are there enough families who can afford our current tuition rate? If we lower tuition, how many more families will be able to afford our school? We also looked at how our tuition compared to competitors—are we priced higher, lower, or on par? We used a SWOT (strengths, weaknesses, opportunities, and threats) analysis to highlight key differentiators and show ways to distinguish a school from the competition.

With this discovery, we were better able to see our problem: We needed to increase affordability and boost enrollment.

Similarly, Soundview School examined its market using NAIS’s Market View, a tool that helps schools map projections of a community’s demographic data around historical enrollment in particular ZIP codes, including median income, traffic patterns, and potential commutes, along with other custom visualizations to help them better understand their market conditions. The school looked at birth rates and family incomes, as well as the school’s historical enrollment and pricing strategy. It also considered external community factors, such as the opening of a new transit station, which could mean a potential influx of new families.

Soundview also determined it had a tuition-pricing problem: Not enough families could pay the current tuition within a 5- or 10-mile radius of the school.

As schools consider whether a reset is the best strategy to solve their problem, they might consider this hypothetical: Imagine a school charging $35,000 for tuition. Then, this school lowers tuition by 20%, bringing the tuition to $28,000. Using different tools, a school can see how many families can afford tuition at the list and discount tuition. The pool of families able and willing to pay $28,000 is significantly larger than those able and willing to pay the full $35,000. If that’s the case, then a tuition reset may be an appropriate strategy for this school. However, if the delta in market size between the two price points is negligible, then a reset is probably not the right tool for this strategy.

What’s the Impact?

Once a school determines its diagnosis—the problem it is trying to solve by lowering tuition—it must also do some work around the current discount rate. Many schools struggling with enrollment, for example, bolster their student body by offering financial aid and other tuition discounts. The discount rate, also known as net tuition revenue (NTR) or the actual dollars collected from tuition-paying families, is the total institutional financial aid divided by the gross total tuition. So if a school’s NTR is $10,000 and the school’s published tuition is $20,000, the discount rate is 50%. The more that this happens, the less families understand and appreciate the value of the education.

At PCD, there had been a substantial discount rate, and as we explored the financial implications, we looked at how it would change with a lower tuition price. We talked about whether to increase or decrease financial aid. Would we be able to sustain the financial impact of a lower tuition rate without compromising the quality of education? And we explored the rewards of a tuition reset, such as increased enrollment and improved accessibility, as well as the potential risks, such as lower revenue and brand perception.

After projecting different rates, enrollments, and NTR, PCD determined that a 36% tuition reduction would allow 6,000 more families in Rhode Island to afford the new tuition threshold. Given the number of additional families who could afford our tuition at the new price point, it gave us confidence that this would be a viable strategy to grow enrollment.

Is It Mission-Aligned?

As part of this process, schools must ask whether the move to lower tuition maps back to the school’s larger strategic goals. And schools must show that while they’re lowering tuition, the value of an education at their school is increasing.

At PCD, we wanted to show our community that the tuition reset wasn’t a stand-alone initiative and that the quality of education wouldn’t be lowered. The reset was part of a larger strategic plan, “The Quest,” aimed at providing an education that is more accessible, personal, and relevant. The tuition reset was just one piece to make a PCD education more accessible and approachable to as many families as possible.

In an effort to personalize education and help each student see how they can thrive, we also launched the PCD Playbook, a personalized guide for each student that tracks their abilities and ambitions over the school year. We partnered with a third-party online provider to provide a digital learning program for students in grades 6–12 who don’t live close enough to the PCD campus to attend in person. We focused on meeting the needs of students in a way that is relevant to the world we live in today and to create adaptability for an unknown future.

With these initiatives, we were able to show our community that while tuition might be lower, the value of a PCD education is increasing.

Bancroft School (MA) also recognized the need to align the tuition reset with the school’s mission. Chief Financial Officer Scott Pottbecker was concerned about the potential negative implications—just like luxury goods and services, the quality of a school is often tied to the price point. Would a lower price suggest lower quality?

When Pottbecker started in his role in 2023, he scoured the Bancroft website and other school information to better understand the best way to position the tuition reset. He came across the 2019 strategic plan and discovered language that closely connected to access and affordability for families in the Greater Worcester, Massachusetts, area. Pottbecker found the story he needed to help announce the new tuition rate and connected it back to the school’s mission.

Also aligning the reset to mission, Soundview paired its reset, which became an all-inclusive tuition, with campus and program improvements. After making upgrades to its lightly used performing arts center, the school can now use it for more programming. New messaging highlighted the school’s mission about access, and the school thoughtfully examined every program, curricular or extracurricular, to make sure it was accessible to the neighborhood needs. Since then, Soundview has added a learning support program, helping to meet more students’ needs, and included outdoor programs in the cost of tuition.

How to Spread the Word?

Though they have usually worked many months—or years—behind the scenes, school leadership will be excited to announce a tuition reset to the community. At this point, it’s essential to be transparent about the plan and anticipate multiple constituents’ concerns. Creating value in a tuition reset isn’t just about lowering the price but finding enhanced ways to deliver on school mission and to differentiate the school from the competition—and that needs to be communicated.

When the tuition reset emerged as the best strategic decision, PCD invested in a public relations and marketing firm to help with messaging and position the rollout. We created a waterfall communication for internal and external constituencies, and hosted a press conference on campus for local media. This created a lot of buzz, including national media attention. The school was prepared with responses to concerns from faculty worried about salaries and staffing reduction. And when alumni contacted us asking if the school was OK and noting that the new tuition was far lower than that of our crosstown rivals, we could share our carefully crafted plan.

At Bancroft, school leaders hosted a series of community gatherings to announce the reset, explain it in greater detail, and answer questions in real time. This built greater confidence in the plan, and it was amplified as the school successfully executed it.

Into the Future

Tuition resets often fail when schools skip the critical first step of diagnosing the challenge. Schools need to understand why they are committing to a reset and how it will affect the school’s trajectory—and how it will impact current and prospective families, faculty, staff, and alumni. It’s a strategic move that has the power to increase affordability and enhance diversity, improve perception and value, and be part of a bigger plan to keep the school thriving into the future as the educational sands continue to shift. And while it might not work for all schools, it’s certainly worth considering.

When Folan shares the cost of a PCD education today, he’s proud of the work that he and his colleagues did to increase enrollment and affordability. While the odds of a successful tuition reset were against PCD, we did the work to make it work.

Go Deeper

Check out these articles, tools, and other resources on tuition resets and more.