ISCA Weekly Chair Post
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October 17, 2019

The Case to Raise Tuition Above CPI-U

Your Finance Committee is probably beginning conversations about next year's budget and what tuition rates might be. How much should you raise tuition - or not raise tuition - is the ultimate question and decision that has to be made.
Independent School Management (ISM) recently published an article that makes the case for school's to not only look carefully at the actual inflation rates for your school's city, often reported as the Urban Consumer Price Index or CPI-U, but also why increasing tuition above that inflation rate may be prudent financial management for independent schools.
In this article, ISM introduces the concept of the Baumol theory which "indicates a need to set tuition above the inflation rate of your area and your total expenses rate of change below that same inflation rate to ensure a balanced operating budget."

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Weekly Chair Post written and compiled by
Bethany Di Napoli, ISCA Executive Director

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