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Dec 7, 2021 6 min read

Inflation Driving Up the Cost of Running Your Child Care Center? It May Be Time To Raise Your Tuition.

Leah Woodbury By: Leah Woodbury

No one wants to pay more for a service, and child care tuition is no different. 

But due to increases in the prices of everything from food to rent in recent months due largely to strained supply chains, increasing the fees at your child care center may be something you must consider.

It can be tough to communicate a hike in tuition when you know parents are being hit with increased bills on many fronts. But when your expenses start to outweigh your income, you must find a way to keep your lights on and your staff paid.

It’s vital to plan and communicate in advance when raising your tuition rates. We have four tips to help you share the news with your families.

Minimize Surprises 

You can ease some of the shock of a tuition increase if parents know from the start that it’s a possibility. In your contract with families, include a section that states that your rates are subject to change and outline how and they will be notified. 

Review this information with new families and put it in your child care handbook.

Be consistent. Every time a new child enrolls, present the terms of service to parents. This is your chance to explain the value of the child care and preschool services you offer and under what situations their tuition could increase. 

Explain Why Tuition is Going Up

Give the proper amount of notice directly to families, in writing.   If you are giving the notice in writing, but counting on a child to take it home, there is a very good chance it will end up at the bottom of a backpack.

Parents may digest the news of a child care tuition increase a little easier when you offer some explanation of why in the communications you send, whether by personal letter, email, in-app messaging or school-wide newsletter.

While you don’t have to itemize every expense, it does help you maintain a good rapport with parents if they know where some of the money is going. 

If inflation is the reason why you’re increasing tuition, say that. If you can, outline steps that your child care center has taken to reduce its costs and why those steps have not yielded the savings necessary to stave off a tuition increase.

Here are some facts you can include in a letter to families:

  • The annual rate of inflation in the United States hit 6.2% in October 2021, the highest in more than three decades, as measured by the Consumer Price Index.
  • Reasons for the increased cost of goods include continuing disruptions in global supply chains amid the coronavirus pandemic and turmoil in the labor markets.
  • Prices for medical care, household furnishing and operations, as well as recreation all increased this fall.

But however you communicate your new rate to families, don’t apologize. You know the value of your care and what it takes to stay afloat.

Calculate Your Tuition Increase Carefully

When you raise rates, make sure you’re covering your expenses and always budget in an emergency fund.

If you can, try to keep any increases within 2 to 5% of the total tuition parents are currently paying.

For example, let’s say you’re charging $245 per week to care for a 2-year-old. If you increase that rate by just 2%, it’d be about $5 more a week. That’s $260 more for a year of care. A 5% increase would yield $637 more per year.

Be Competitive

Are you conducting regular market surveys of other area child care, preschool or after school programs to make sure your tuition and fees are in line with the going rate in your area?

If your prices are too high and you aren’t offering big perks that warrants it, you may need to take a good look at your expenses. If your rates are below the market average, parents may question the quality of care and child development your program is providing.

There’s no doubt that many child care centers are increasing their rates, whether due to raises to help retain and attract staff or to inflation … or to both. You are not alone in this. If child care centers in your area haven’t increased their rates, it’s likely they will in the coming months.

How Procare Can Help

Procare’s invoicing capabilities are one way we can help you manage your child care center’s finances.

Most parents will understand why you’re asking for a tuition hike. They value the quality care you provide when it comes to their children’s education, development and care.

It’s difficult to raise tuition if you don’t have a clear view of your expenses and the revenue you’re bringing in. With Procare’s all-in-one child care management software, you can get your complete financial picture in just a few clicks. That way, you can make data-driven decisions that make sense for your business and the families you serve.

Procare’s eDocuments feature lets you share news with parents within the Procare platform, giving your center a solution to create, send, review and store digital documents. It’s a way to digitize a significant part of your workflows that currently rely on pen and paper. 

You can prompt them to review documents by email, and they can digitally sign a document — no need to download, print, sign, then return to you. And parents can access it from their phones!

Another key part of surviving the increased costs your child care center incurs is to attract new families. To do that well, you need to know how effective you are at enrolling families who show an interest in your center. 

Lead Insights from Procare can help. It is a dashboard that shows how effective your center is at converting prospective customers, also known as leads, into clients to help you drive enrollment.

Two out of three child care businesses that use software use Procare. We’re here to help.

Procare is offering end-of-the year promotions to help child care providers. Request a demo now to see how Procare can save you money now and into 2022.

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Leah Woodbury

Leah Woodbury is the head of content at Procare Solutions. Her job includes writing about topics that matter to child care professionals and finding ways to help them do their important work. She’s a mom of two who loves getting updates about what her preschooler is doing during the day via the Procare child care mobile app!

Leah Woodbury