A Business Model Problem or an Education Model Problem?

That private, independent schools have a business model problem is more or less conventional wisdom at this point. As tuitions continue to rise at CPI+2.something rates (what our research confirms has been true since at least 1980) and household income flattens (at least in the U.S. from 1998 through 2016), schools outside a handful of booming areas have seen demand soften. And the post-2008 bump in financial aid requests and grants has not regressed to the historical mean as one might have expected.While these conditions certainly create business problems--such as in whether there is sufficient net tuition revenue to sustain the school--we question whether the fundamental issue is with business or education. It seems like our business model, including its reliance on cost-based pricing, is really just epiphenomenal to our educational model; e.g., along for the ride. Everything about how we educate, including emphasizing rich teacher-student ratios--drive toward the current price point. The bottom line is that one cannot lower prices in a nonprofit environment unless one lowers costs, and one cannot lower costs without changing how we educate.Realizing that the educational model is the proverbial "third rail" of our sector of the education industry, we just don't see a way forward without having that conversation. Schools that pretend prices can be reduced without fundamentally changing how the product gets built are stuck searching for the Holy Grail (with about the same success).