Financing Training Schools: Creating Promising Futures for Providers and Consumers

Today we’ll take a look at a Medical Assistant training school that uses in-house financing to fill their classrooms and increase revenue. The success of this business model depends solely upon how many seats can be filled in each classroom. In the case of this particular school, once the classroom is 55% full, all expenses are paid for; after that, any further sign-ups are strictly profit. Financing options are key for students who are financially on the fence about getting their certification, but could potentially fill the classroom and increase revenue. With a few rare exceptions, payment is almost guaranteed once students complete the certification and gain employment. But while placement rates for medical assistants are high, student loan approval rates are low, and 3rd party financing sources for trade schools aren't much better. Rather than sit around and wait for potential students to be financed, this particular school decided to offer their own in-house financing plans to maximize enrollment and assure a steady cash flow. While filling the first 55% of the classroom, the school offered more conservative financing options, but once that point was reached and all costs were taken care off, they became more aggressive with their lending practices. The school kept lists of potential students who had expressed interest but never followed through, and was then able to contact them and offer to finance their education at a more attractive rate. The benefits of in-house financing lend themselves particularly well to this kind of scenario, in which students are working toward a certification over a six-month period. The school structured plans with a down payment, followed by 12 monthly payments. If a student defaulted at any point during their training, the school could simply withhold their certification. [...]