April: The Importance of Offering Parents Customized Payment Plans

Remember when “swiping” was a bad thing?

20+ years ago, if someone swiped a card, that meant someone didn’t pay for a birthday or anniversary greeting from the local supermarket or drug store. Today, swiping a card is how someone pays for that greeting card.

Lots of things have changed in the past 20+ years. Not just terminology, but clothing styles, the geo-political climate, security at airports, automobile design, technology, social media, mobile devices, educational environments, lesson plans and teaching strategies.

Oh, and then there’s COVID. And now, AI.

And with all these changes, research has shown students’ brains have changed.

If you have difficulty believing that, try to get a child to watch an episode of MisterRogers’ Neighborhood. It was a long-form 30 minute program with segments that lasted about 10 minutes. That morphed into Sesame Street, where short-form lessons were packed into an hour. Sure, it was longer, but those shorter segments shortened attention spans.

Now we have the hashtag TL/DR – Too Long/Didn’t Read. That’s a true slap in the face to anyone that writes any kind of content today.

Why?

High school and college requires 3 page, 5 page and 10 page term papers. A Master’s Degree program requires the writing of a thesis, and a Doctorate requires a dissertation, and a defense of the dissertation. Then these learned individuals are thrown into a workplace that wants bullet points.

So when one considers all those things that have changed, the realization is that pretty much everything has changed.

As we continue to grapple with all these changes, the phrase “That’s the way we’ve always done it” no longer has merit.

Yet, there are still schools who are STILL intent on getting back to doing “business as usual” as they have done for decades, and going backward to a time when everything was “great.” I’m sorry, but The Great Depression, World War II, race riots, the Vietnam War, the Iranian embassy holding Americans hostage for 444 days, the difficult economic conditions of the 1980’s and concerns about Y2K in the 1990’s weren’t great.

And one of those things that have stayed constant for the past 40 to 50 years is the payment plan schools offer to parents.

If parents can’t afford to pay tuition in one up-front payment, then payments are offered over ten months. Why? It’s easy to divide by 10.

And, when you’re tracking payment records on index cards or in a spiral-bound notebook, it’s best to keep things simple.

As H. L. Mencken is quoted as saying, “For every complex problem there is an answer that is clear, simple, and wrong.”

The brutal truth is that today’s parents don’t care about what’s easy for you; they want – no, EXPECT – what is convenient for them! They expect personalized and specialized treatment. They want payment options that suit their pay schedules. If their mortgage or rent payment is due the first of the month, and your tuition payment is due the first of the month, guess which payment gets priority.

Some parents might want to pay monthly on the 23rd of the month, simply because there aren’t any other bills due at that time. Some parents might want to pay bi-weekly since that’s how they get paid. Some parents may budget their bills weekly rather than monthly. Some parents might want to pay a little of their tuition obligation at the start of the school year, but with a lump sum “balloon” payment after their bonus or income tax refund is received. Some parents may want to pay over 9 months, but others may ask for a couple of months more. Some parents might even want 6 payments due every other month.

What’s important to remember is that the mindset of the customer has changed, primarily influenced by technology. If the customer has a unsatisfying experience, they will normally do three things:

Complain to others about it;
Post comments about their experience on social media apps; and/or
Seek an alternative solution.

What does this mean for your school’s tuition billing practices? If your school expects that parents will either pay tuition for their children in full or over 10 monthly payments, and does not provide accommodation for their individual preferences or circumstances, you might find that they just don’t pay…even though they said they would abide by your financial policies.

Also, you might find that today’s Millennial parents EXPECT you to send them a bill or a reminder of a payment. Even though they know their payments are due on a particular day of the month, if you don’t send them something to remind them, they think they’ve been given a reprieve of some sort. After all, if you want your money, you’re obligated to remind them of their responsibility. What’s quite interesting is that this is completely congruent with a quote from the great writer Samuel Johnson:

“People need to be reminded more often than they need to be instructed.”

Today’s parents are members of the generation that will not necessarily make sacrifices to meet the needs of your school, but they will gladly pay for outstanding experiences! Just as in any other place of business today, the voice of the customer is a voice that must be heeded, or the business may find themselves out of business.

Because of this, it makes sense to use a tuition management provider that can offer customized payment plans for parents. Using a third-party, like FACTS, to do billing for your school’s tuition and fees provides a real-time payment platform for parents, mobile payment options and a comprehensive, customizable, compliant and secure solution to mitigate the risk associated with collecting checks and cash at your school.

Do I recommend FACTS? Yes. Are there other companies that will provide tuition management services? Yes. Are there differences? Yes.

What are they? Think of your school. Is your school different from every other school in your market? If you’ve said “Yes,” then what makes your school unique in the marketplace? If you’re thinking it’s the amount of tuition you charge, that’s could be why your school may be struggling to survive. More than likely, rather than your school’s tuition amount, the issue today is HOW your school’s revenue model is structured.

And usually, the difference isn’t in “what” a company or organization does, it’s “how” it does what it does.

If you’d like to have a conversation about how I can help you formulate a tuition policy and structure that’s built on incentives rather than discounts, providing a preferential option for the poor, that considers not only your cost of education but an even more important revenue calculation, and is congruent with Scripture, lets set a time to have a chat by visiting this link.

So what about those families that have disenrolled their children from your school, and still have a balance owed to your school? Some thoughts about that coming your way next month.