Finance
What Sibling Discounts and Concessions Really Cost Your School
No school decides to give away a large part of its fee income. It happens one family at a time: a sibling discount here, a staff child there, a scholarship for a bright student, a waiver for a family going through a hard year, a round number agreed at the counter to close an admission. Each one is reasonable and each one is small. The trouble is that nobody adds them up, so the total is never a decision. It is an accident, and usually a larger one than the owner would guess.
Why nobody knows the total
Concessions are granted by different people for different reasons, and they rarely appear anywhere as a cost. They show up as a lower fee on a challan. The fee register records what each family owes; it does not record what the school gave up to get there. So the question "what did concessions cost us this year?" has no line to read it from.
The kinds that add up
- Sibling discounts, often growing with each additional child
- Children of staff, sometimes free and sometimes discounted
- Merit and need-based scholarships
- Discounts offered to win a family from another school
- One-off waivers for a family in difficulty
- Round figures agreed at the counter to close an admission
Adding them up: yield
The simplest way to see the total is yield: the fees you actually billed, divided by what the same students would have been billed at the list fee.
Take an example school with 400 students and a list fee of PKR 5,000 a month. At list price it would bill PKR 2,000,000 a month. After every concession, it actually bills PKR 1,700,000. Its yield is 85%. Concessions cost it PKR 300,000 a month, or PKR 3,600,000 a year. That is roughly the salary bill for several teachers, given away in pieces small enough that nobody noticed.
What it does to break-even
Concessions matter most for the number of students the school needs to cover its costs. Say the example school's costs are PKR 1,500,000 a month. At the list fee of PKR 5,000, it would break even at 300 students. At its real average fee after concessions, PKR 4,250, it needs 353. Concessions have moved the school's break-even by 53 students.
Put another way: every new concession raises the number of admissions the school needs next year to stand still.
Deciding which to keep
None of this means concessions are wrong. A sibling discount may be what keeps three children at your school rather than one. A scholarship may be the best advert you run. The point is that each should be a decision with a number attached, not a habit.
- Record every concession as a concession, with a reason, rather than as a lower fee
- Decide who can approve each kind, and up to what amount
- Set a total you are willing to give away in a year, and watch it against yield
- Review the list once a year, before the new session's fees are set
Where Edflo fits
In Edflo, discounts, scholarships and sibling concessions are applied at student or class level from the fee structure, so every one is recorded as a concession rather than disappearing into a lower fee. The profit and loss shows revenue and concessions separately, and the Concessions & Yield report shows what was given away and what share of the list price remains. The owner's dashboard puts revenue per student and break-even enrolment beside it, so you can see what the concessions are doing to the number of students you need.
Key takeaways
- Concessions are granted one family at a time, and almost nobody adds them up.
- Yield, fees actually billed divided by fees at list price, shows the total in one number.
- Concessions raise the number of students a school needs to break even.
- Record every concession as a concession, with a reason and an approver.
- Set a yearly total you are willing to give away, and review it before fees are set.
Frequently asked questions
What is fee yield?
The fees a school actually billed, divided by what the same students would have been billed at the list fee. A yield of 85% means concessions and discounts took 15% of the school's potential fee income.
How much should a school give away in concessions?
There is no standard figure worth quoting. What matters is that the total is a decision rather than an accident: know what it is, set a limit you are comfortable with, and review it once a year before the new fees are set.
Are sibling discounts worth it?
Often, if they keep whole families at the school. But each additional discount lowers the average fee and raises the number of students you need to break even, so it is worth knowing what they cost in total before extending them.
Should concessions be recorded separately from fees?
Yes. If a concession is recorded simply as a lower fee, there is no way to add concessions up later. Recording each one as a concession, with a reason, is what makes the total visible.