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Tuition on the Rise

In six years, Greenhill’s tuition has risen $8,225.

Greenhill administration has acknowledged this rapid increase in tuition as a problem and is attempting to combat it. Last spring, the business office conducted a study that focused on the school’s long-term financial sustainability. According to Greenhill, the study carried the goal of reducing the rate that tuition increases and maintaining the school’s economic diversity.

If the study is successful in lowering the school’s expenses and ultimately reducing tuition increases, the hope is that Greenhill can stay economically diverse in terms of families who attend. If tuition continues to rise rapidly, the school would risk their ability to accommodate families from all economic backgrounds.

“We knew we wouldn’t be able to stop these [tuition] increases, no one has, but we wanted to moderate those increases. Tuition has been increasing either 4 or 4.5 percent over the last 4-5 years and we wanted to try to decrease that,” said Head of School Scott Griggs.

According to Mr. Griggs, tuition rises annually because of expenses such as insurance, ground and facility maintenance and utilities and importantly the extra costs of faculty salaries and benefits. The cost of these things rise every year as costs of living in Texas increase. One of the largest increases in yearly expenses comes from employees’ medical insurance which continues to rise significantly more than tuition does.

The financial sustainability study was coordinated in the spring of 2017 by Greenhill’s former Chief Financial Officer, Melissa Orth, Mr. Griggs, and an outside group of financial experts from “Measuring Success,” a group that works with nonprofits to “improve companies’ effectiveness by finding the information needed to improve strategic and tactical decision making,” according to the group’s website.

The study was recognized in the 2017 November/December of Net Assets Magazine. The author of the article was Dr. Harry Bloom, the Senior Vice President of Client Solutions at “Measuring Success.”

In the article, Dr. Bloom examines the financial planning and testing process that “Measuring Success” used to help Greenhill conduct their study. It talks about five working groups that the school was divided into for the study to ensure all parts of Greenhill, including administration, maintenance and each academic department were involved. Each groups consisted of faculty members from different grade levels, administration and members from the Board of Trustees.

The five working groups identified Personnel, Teaching and Learning, Net Tuition Revenue, Non-Tuition Revenue and Purchased Goods and Services as potential areas for increased financial sustainability were Personnel, Teaching and Learning, Net Tuition Revenue, Non-Tuition Revenue and Purchased Goods and Services.

Last year, Mrs. Orth worked with faculty through all divisions of the school to find ways of reducing the school’s budget and increasing the revenue.

Kendra Grace, Greenhill’s Chief Financial Officer as of this year, took over the study at the start of her stint this fall. She now oversees the implementation of the initiatives that resulted from the study when creating Greenhill’s annual budget in the fall. This includes subtracting items the study deemed unnecessary and purchasing more cost-efficient supplies.

“Each working group across campus developed hypotheses with ways they could either increase revenue or decrease expenses with the goal of being able to limit tuition increases to 3% a year over the next 5 years,” said Mrs. Grace.

One of the main responsibilities of the different employees involved with the creating these hypotheses was to compile lists of items that the school would no longer need to purchase.

The Purchased Goods and Services group listed water as one of their items that Greenhill could cut back on. They learned that Greenhill used 1.9 million gallons of water every year. Instead of paying for this water from the city, Greenhill decided to build a well last spring so the school could supply their own water. This change alone saves the school nearly $100,000 a year according to Director of Facility Operations and Services Mike Willis.

While the study identified a multitude of ways the school can cut back to reduce costs, not all are feasible. When Mrs. Grace took over this year, she was tasked with choosing which different hypotheses, like the well, she would actually be able to implement.

“We had the summer to go through each initiative and determine if it would actually work or not, for instance, do we decide we can’t increase prices on something because the market won’t allow it,” said Mrs. Grace.

Families would quickly see the benefits if the rate that tuition rises were to slow down, according to Mrs. Grace

“By reducing the rise of tuition from 4.5% to 3%, a family with one student would save between $1,200 and $1,500 a year over a five-year period,” said Mrs. Grace.

Graphic by Harrison Heymann

Originally published in the February 2018 print issue

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