Uh, oh - it feels like you just purchased the last round of laptops for your students, but their hardware is already drifting out of date. It's only been a few years, but it looks like another large purchase order is ahead. How to manage this expense? Leasing can offer a potential solution. Here's how…
Coming up with a large out-of-pocket expense is always troublesome for an IT manager. With leasing you're on a consistent budget, with a known dollar amount year over year. That's a benefit that really resonates in the education sector, where budget considerations loom large and parents want their kids to have the newest technology available.
Leasing keeps schools' costs predictable while providing plenty of flexibility in how they allocate those dollars over longer time horizons. Smaller, predictable payments help avoid the risk of budget dollars not being available when 100% of the funds are exhausted up front. Schools who lease equipment can also make plans for technology rollouts across larger systems, such as staggered transactions for different grade levels or campuses over a predetermined period of time.
Here are a few other advantages of leasing your education technology, rather than purchasing it outright:
Keeping data and hardware secure is a cost that often catches educational institutions off guard. Personal details, test scores and administrative records are among the types of sensitive information that might reside on computers in K-12 schools. At colleges and universities, there may be financial or personnel data on a server or housed in a data center that must be protected. But installing and maintaining advanced security software to address this need can add incremental costs of as much as 50 percent of the initial cost of the hardware itself.
Companies that provide leasing solutions to educational clients can finance the software that helps keeps data on the hardware secure. That amount is simply rolled into the leasing term and paid for over the life of the lease, along with any other software expenses.
I hear from a lot of school systems that they have closets and classrooms full of broken or outdated machines. They're not able to manage the costs of properly disposing of them so they just end up keeping them.
By contrast, when schools return equipment at the end of a lease period, the only step they need to take is to ensure that they wipe all private information before returning the equipment. Leasing companies take on the responsibility of managing the IT waste by contracting with authorized equipment disposition companies that follow environmentally-friendly practices.
Tracking the millions of pieces of computing equipment in schools and universities is another major undertaking. In public schools alone, there were
more than 15 million computers in K-12 classrooms, according to the most recent comprehensive national report on instructional computing.
Some finance companies provide free services that allow customers with online tools to track equipment and manage payments. Certain lease agreements may even include provisions for damaged or unreturned assets at end of lease.
Flexible payment terms are another attractive feature embedded in most lease agreements. Standard terms for educational equipment leases tend to run 24 to 36 months, but lessees can set up payments to fit their needs. Monthly or quarterly payment schedules, for instance, grant schools even greater control over their cash flow.
A key consideration for schools and universities looking into leasing arrangements for computing equipment is ensuring that the lease term matches the warranty. Administrators should factor in accidental damage to avoid negative pay streams for products that suffer under the wear and tear of daily use - a risk that is higher when the primary users are children. Some schools even require parents to pitch in to cover part of the costs as protection against damage.
Overall, when care is taken to ensure that the lease term matches the equipment's warranty, leasing can offer the flexibility and affordability to meet an ever-changing set of challenges for boards, trustees and other administrators who must ensure that students have the most up-to date technology.
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