If you want to have a successful scholarship program that doesn't result in you getting screwed, and that really and truly helps people who need it, you need to set it up properly.

As I mentioned yesterday, just giving away memberships to anyone who says they can't afford your school is a recipe for disaster. For one, some people will tell you that just to haggle you down on your price.

Case in point... 

When I had just opened my first full-time school, I had a family of three come in for an intro lesson. Dad and son wanted to train together, and mom wanted to take kickboxing classes. 

At the time, I was barely making rent and my bills on the space, because I had to make the jump to a full-time facility earlier than I would have liked after losing my part-time location (for the 2nd time, no less).

Long story short? When it came time to enroll them, Dad talked me down something like 40% on my stated rates. Turns out he was in corporate sales at Dell, and he sensed that I was desperate to enroll them so he took advantage. 

When I saw them drive away in their brand-new BMW, I swore I'd never budge on my rates again. 

My point here, obviously, is that people will give you all sorts of B.S. stories about how they can't afford your classes. Rarely will you come across someone who is actually in need, which is why you have to be careful who you choose to help with tuition reduction (scholarship) programs.

So, here are a few tips to help you set up your scholarship program right.

Tip #1: Keep it In-House

Manage your own program. Don't use a third-party org to help you do fundraisers or to hold your scholarship funds in escrow. Just handle it yourself. Trust me on this.

Tip #2: Don't Advertise It

The only time you should ever mention that you have a scholarship program is when you have someone in your office who is obviously at need. You will know them when you see them. They'll be ready to enroll, then you tell them your rates and everyone's face just drops.

Maybe it's a single mom, or a family where the main breadwinner has been underemployed for years. Whatever the reason, it will be obvious to you that this family needs help. That's the only time you should mention your program.

Tip #3: Create Barriers to Entry

This will prevent the dead beats from taking advantage of you. I have always required three things from people who were on scholarships at my schools -

1. 90% attendance (only one missed class allowed per month).

2. Academic excellence. And if a kid's grades are low when they start, I tell them I expect them to bring them up.

3. Exemplary behavior at home and at school. I tell them they are representing my school now, so I expect them to make me proud.

It's as simple as that. People who are just trying to take advantage won't comply, so you can kick them out. However, people who really want it and appreciate it will do everything they can to stay in the program. 

Tip #4: Make Everyone Pay Something

I do 50% tuition scholarships. People who are in the program pay half-tuition and no down payments or other fees. I waive belt fees, and I give them a free uniform just like everyone else. But, they still pay something.

Why? Because it makes them appreciate it more, and also because deadbeats won't even try. 

Tip #5: Keep it Confidential

Tell your scholarship students that the final condition of their scholarship is that they do not tell other students that they are receiving a scholarship. And, you shouldn't let anyone else know they are receiving a scholarship either, except for staff who are on a need-to-know basis.

This serves two purposes. First, it allows the scholarship family to retain a sense of dignity. And second, it will prevent you from getting a spate of people approaching you wanting their tuition cut in half.

Final Advice

A scholarship should be between you and the student. You aren't doing this for the glory or to make people think you're a saint. You're doing it because it's the right thing to do.

Also, treat your scholarship students exactly like any other student. Don't favor them, but don't treat them like they're second-class, either. The idea is to let them feel absolutely like every other student, because they are.

Alright, that's it for today's email. Tomorrow we'll start discussing service-based education programs and how you can use them to help your community while you market your dojo.