Access and Affordability: What Heads & Trustees Need to Know CAIS Trustee/School Head Conference January 27, 2018 Mark J. Mitchell Vice President, NAIS mitchell@nais.org

How Does Our Price Affect Our Ability to Enroll the Best Students For Our Mission?

What Heads and Trustees Need to Know What it means to be “affordable” Dynamics of the evolving applicant and recipient pools Data markers reflecting affordability pressure Strategic responses

Avg Tuition, All Grades 2016-17 Who Can Afford It? Avg Tuition, All Grades 2016-17 Full-Pay Income NAIS Day $25,579 $176,030 CAIS Day $28,982 $186,885 NAIS Bdg $55,250 $280,620 CAIS Bdg $54,591 $275,370 US Median: $68,272 Source: NAIS Demographic Ctr In California (2017), Median HH income = $74,950 12.4% earn over $200K In Los Angeles (2017), Median HH income = $73,889 12.5% earn over $200K In San Francisco (2017), Median HH income = $95,276 19.6% earn over $200K Sources: Tuition data from NAIS DASL; Full-pay income based on SSS EFC Simulator (Assumptions: 2 working parents, 2 children, 1 child enrolled, one parent earns $25K, no net worth, standard taxes, OH residents for NAIS calcs, CA residents for CA calcs, no COLA)

Pct Change in Income and Tuition in California By 2022… In California, median income projected to grow 26.5% In San Francisco metro, median HH income projected to grow 24.3% In Los Angeles metro, median HH income projected to grow 26.5% Nationally, median HH income projected to grow 26.7% Sources: NAIS Demographic Center for income data; NAIS DASL for tuition data

Pace of Change Data sources: NAIS DASL, US Census Dept

The Evolving Applicant Pool Range of Total Family Income % of Filers Source: SSS By NAIS PFS Filer Pool. Reflects total income from all sources, before taxes or allowances, as reported by families on the PFS submitted.

The Evolving Recipient Pool Source: SSS processing system database; analysis of 35,000 financial aid awards in each year

Delivering on Purpose? Source: SSS State of Financial Aid Survey, 2016

People Are Grappling With… Lower school demand…the financial aid dilemma Millennial parents…values and preferences Financial aid terminology…Indexed, Individualized, Sliding Scale, Flexible Tuition

Affordability Markers

Total Enrollment 5-Yr Chg NAIS 2.2% CAIS -0.5% Source: NAIS DASL, cohort sample

Fin Aid Activity, Completed Applications 5-Yr Chg NAIS -9.6% CAIS -21.3% Source: NAIS DASL, cohort sample

Financial Aid Activity, % Enrolled Rec’g Need-Based Aid Source: NAIS DASL, cohort sample

Fin Aid Activity, Avg Grant 5-Yr Chg NAIS 21.2% CAIS 25.8% Source: NAIS DASL, cohort sample

Day Tuition Average—All Grades 5-Yr Chg NAIS 22.5% CAIS 26.6% Source: NAIS DASL, cohort sample

Bdg Tuition Average, All Grades 5-Yr Chg NAIS 23.1% CAIS 20.6% Source: NAIS DASL, cohort sample

Financial Aid Activity, Discount Rate Source: NAIS DASL, cohort sample

Net Tuition Revenue NAIS 19.4% CAIS 25.7% Source: NAIS DASL, cohort sample

Compared to all NAIS schools, CAIS schools see… The 5-Yr Trending Upshot Compared to all NAIS schools, CAIS schools see… Steeper growth in day tuition/fees, slower growth in bdg tuition/fees Steeper growth in avg fin aid grant Day tuition growth outpacing growth in avg financial aid grant Steeper decline in fin aid applications rec’d Decline in number and % of students enrolled rec’g fin aid Steeper growth in net tuition revenue, slower growth in discount rate Enrollment flatness, slight decline

The schools that apply strategic thinking to financial aid… Responding Strategically The schools that apply strategic thinking to financial aid… Identify and articulate the primary purpose and goal of financial aid investment Clearly define terms and desired outcomes Understand key internal and external markers of affordability pressure Provide the resources and flexibility needed for impact

Net Tuition Revenue Goal Meet enrollment, Miss NTR Price, value proposition? Meet enrollment, Meet NTR Composition, mission-appropriate? Enrollment Goal Miss enrollment, Miss NTR Market capacity, fin aid limits? Miss enrollment, Meet NTR Diversity, outreach? Net Tuition Revenue Goal

Your Role “…stick vigilantly to your purpose, but be nimble about how you get there” edelements.com Don’t… Make or discuss individual award decisions Overprescribe specific practices or tactics Resort to “opinion-rich” decision making Misalign intent, resources, and expectations Do… Affirm purpose, set dashboards and monitor progress Understand and plan for external trends and realities Specify and diversify sources of aid funding Support the voice and professionalism of the admission and financial aid leaders

Mark J. Mitchell, NAIS Vice President mitchell@nais.org, 202-973-9766