Many clients have asked for a simple tools that allows them to step back and see how longer-term trends in family income interact with their tuition costs to create a pattern of rising need that drives their discount rates. 

We have developed a technique to use historical aid and admission data from the last four or five years to build a simple “spreadsheet” picture of how family income, tuition and costs, and need, are related to your tuition discount rate and net tuition revenue for first-year students.

The spreadsheet model captures these patterns using relatively stable historical relationships among these variables as a guide to judge what the future will look like. Included in the model that we provide our clients is a table of assumptions that allow the users to change different economic conditions of the incoming class or a change in the institution’s policy toward financial aid and class size.

Using reasonable projections for family-income growth, future tuition and cost increases and financial-aid packaging initiatives, we can calculate total aid costs and compare that to tuition revenue year-by-year. We use the models under different scenarios to see what happens (to revenue or the discount rate, etc.) if any underlying trend assumption changes.