The Tuition Refund Plan, which ensures certain families their tuition money back if a student leaves the school, will be modified so that families now only have to pay 1.5 percent instead of 2.5 percent of the total tuition. Families that pay the full year’s tuition and all other extra fees by July 15, 2015 will be given the option to opt out of the plan; for everyone else, the plan’s 1.5 percent tuition fee is automatically added to the student’s bill. The income from this fee will then be used to refund students who leave in the middle of the year 65 percent of the tuition cost of the remaining days of the year. The new plan will be implemented in the 2015-2016 school year.
This policy change occurred in light of a recent trend in which the fees paid no longer covered the cost of the refunds. Andrea Nix, Director of Finance and Assistant Treasurer, attributed this to the school’s leniency when offering the Plan to students who paid the tuition in one payment at no additional cost.
“I realized that too few people were paying in to cover a lot of the school, and a lot of the reason for that was that families who paid in full in advance in the summer were getting [the Plan for] free. We were saying, ‘If you pay in full, we’ll give you the tuition refund plan with no charge.’ But we couldn’t afford to do that anymore,” said Nix.
As a result, Nix contacted several other boarding schools in the area, among them Choate, St. Paul’s, and Exeter, to learn about their tuition refund policies. After comparing the policies at these schools to Andover’s, Nix realized that a smaller fee spread across a wider pool would help cover the policy’s costs.
Over the last few months, Nix began revising Andover’s policy in conjunction with Sharon Kramer, Associate Comptroller for Operational Accounting, and Stephen Carter, Chief Operating and Financial Officer. After considering a 0.5 percent, 1 percent, and 1.5 percent decrease from the present 2.5 percent fee, they settled on 1.5 percent of the total amount paid by each student, which would not include the portion paid by financial aid and the enrollment deposit.
Nix also debated whether to switch to an insurance company or to remain self-funded. While communicating with the other schools, she discovered that the majority of them used an insurance company that would handle these calculations. Andover decided, however, that the flexibility gained from staying self-funded would outweigh the added costs to the school.
“We like the idea of self-funding it because it gives us more flexibility. I was at another school, and we used an insurance company, and they have rules, like, ‘No refunds if you leave before October 1 … We want to be able to be more in control of how we run it,” she said.
