The discount rate is the amount of financial aid allocated as a percent of the gross tuition. According to Mark Mitchell, vice-president for School and Student Services by NAIS, there following are the average discount rates for the NAIS schools:
- Boarding-Day Schools = 24.5%
- Day Schools = 14.7%
- Day-Boarding Schools = 20.4%
Here is how you calculate the discount rate. If, for example, your tuition is $20,000 and you fill 300 spaces with full-pay families, you could generate $6,000,000 in tuition revenue. If you give a discount to some families, i.e., providing them with financial aid of about $1,200,000, your school has a discount rate of 20%. This is computed by dividing $1,200,000 (the discount amount) by $6,000,000 (the gross tuition). In this case, you would receive $4.8 million in tuition revenues, assuming that all of the seats are filled and no further discounting is necessary.
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