Ditch the Enrollment Deposit and Generate Thousands in Annual Revenue

If your school uses a traditional enrollment contract with an annual enrollment deposit or an evergreen contract that requires an annual enrollment deposit, then stop right now and see how your school can generate significant annual revenue by switching to a one time “enrollment fee.”

If the idea isn’t right for you, consider how you might use it to generate your own solutions which I’m always glad to discuss during a no obligation Discovery Call that you can schedule any time.

To see how much revenue you might generate, follow the instructions below.

Introduction

Unless your enrollment is in such high demand that current families would never miss a re-enrollment deadline, then you know that the single biggest hurdle to getting current families to sign their enrollment agreement is the annual deposit. 

Let’s end that once and for all by doing away with the annual deposit and switching to a one time enrollment fee at the time of initial enrollment. In doing so, you’ll also generate revenue in multiple ways. Here’ how it works:

  1. Open the hypothetical example shown in the Enrollment Fee Revenue Calculator.  Its view only, so make your own copy in which you can enter your own variables into the yellow fields.

As you will see, the total revenue you can generate depends on:

  1. Total enrollment

  2. Total net tuition revenue

  3. Enrollment fee amount

  4. # of families who forfeit their enrollment fee (detailed below)

  5. # of families who donate or fail to ask for their enrollment fee to be refunded upon graduation (detailed below)

Enrollment fee vs. Enrollment Deposit

For our purposes here, an enrollment deposit is defined as an amount submitted annually with the enrollment contract to secure a child’s enrollment. The deposit is part of the overall tuition.

An enrollment fee is a one time fee submitted at the time of initial enrollment the first year. It is not part of tuition. The fee is refundable minus funds still owed to the school:

  1. At the time of graduation or…

  2. At the time of withdrawal assuming a family has not signed a re-enrollment agreement for the coming school year.

How It Works

Families submit a one time refundable enrollment fee at the time of initial enrollment.

In each subsequent year, the enrollment fee carries forward as families sign their enrollment agreement for the coming year without having to submit any money.

This happens every year of enrollment through to graduation.

Scenarios in Which the Enrollment Fee Would Be Refunded Without Penalty

Scenario #1: If a family notifies the school that a child will not be reenrolling for the coming year anytime before the reenrollment deadline. In this scenario:

  1. If a family signs a re-enrollment agreement, the enrollment fee becomes binding until after the first tuition payment is made (summer?).

  2. If a family notifies the school they will not be returning for the following year or withdraws, during the year before the next re-enrollment agreement is signed, the fee is refunded.

Scenario #2: When a child graduates, the fee will be refunded assuming the family requests the refund after the school provides them an opportunity to do so in April of the child’s final year.

Each April the school sends every family who has a child in their final year at the school an email and an online form. The email should include compelling language that gives families two options for how they would like to handle the enrollment fee.

  1. Donate it to the annual fund - since they submitted the fee up to 14 years ago, it's entirely possible a family forgot about it or is feeling so positively about their child’s experience. Either motivation is likely to yield some families who will donate the fund.

  2. Ask for the fee to be refunded.

Require families to submit their choice via email. This additional step is reasonable and will result in some families never responding, leading to additional forfeited enrollment fees.

In both Scenario #1 and #2, any balance on the student’s account (including tuition due) is deducted before refunding the fee.

In neither Scenario #1 and #2 is a family released from their obligation to pay the tuition balance.

How Could This Work for You

Set the variables on the Enrollment Fee Revenue Calculator to forecast exactly how much revenue your school might generate from this one procedural shift that comes with zero expense.

I believe you could make a very strong argument to your CFO that funds generated from forfeited and donated enrollment fees as well as the interest that is equal to your endowment spend rate should be added to your enrollment/marketing budget. To make that more likely, be sure to have at the ready examples of how you would use these funds to strengthen your enrollment efforts in new and innovative ways.

Questions? Thoughts? Feedback?

As one of our founding subscribers I’m more than glad to consider any of this with you at no obligation.

Just book a Discovery Call when you’re ready.