Increase financial aid twice as fast as you increase tuition

Rule of thumb:
When tuition exceeds 7%-10% of a family's net monthly income, it becomes difficult for them to pay.

Every time you increase tuition, you increase the number of families within your school who cannot afford your tuition.

To ensure that there is an adequate amount of aid available you should plan to increase tuition aid twice what you increase tuition. In other words, if you increase tuition 5% you should increase tuition aid 10%. If you increase tuition 7% you should increase tuition aid 14%.

In surveying schools for nearly 20 years we have seen a disturbing trend. Schools have increased tuition with little or no increases in tuition aid. As a result, the percentage of enrolled families making $35,000 - $100,000 has been decreasing at a rapid rate.

For many schools the percentage of families making under $35,000 hasn't changed appreciably. This is because the meager tuition aid they do give out meets this group's needs. The group shrinking is families making between $35,000 and $100,000. They are being replaced by families making over $100,000.

Using the 7%-10% rule of thumb, if your tuition is $4,000, and a family taking home, say, $90,000, has 2 children enrolled, they will be having difficulty paying tuition. ($90K yields about $6K/month take-home. 7% of that, $420/month = the stress point.)