How do schools determine financial aid eligibility?
Private boarding schools determine financial aid eligibility by requesting the parent's income and assets and the student's income and assets and then using that information to produce a figure that is known as the "expected family contribution" to tuition, room and board. This figure is generally subtracted from the cost of the school and, in theory, the remainder is the financial aid package.
The income figure that the school wants from both the parents and student is generally the tax year immediately preceding the year in which you are applying. For example, if you are applying for aid for the 2005-2006 school year now, then you would supply the information from your 2004 tax return. However, when it comes to assets, the school wants to know what the value of the asset is as of the date you complete the form. Assets include, but are not limited to, the equity in your home; bank accounts; certificates of deposit; stocks, bonds and mutual funds; beneficial interest in a trust whether any of the principal or income is available to the parent or student now or only in the future; other real estate investments; value of a business owned by the parent; and value of a parent's partnership interest if any. Please note that, as a general rule, a school does not ask about the value of your retirement assets such as 401K's, IRA's, etc. However, some schools on their own forms do ask about these assets to determine if you have a significant amount of money set aside for retirement with very little currently available assets. A financial aid office might determine that a family in this situation should have saved more money to pay for school rather than putting it away for retirement and thereby reduce a financial aid award.
Please remember that the school has complete discretion to increase or decrease a family's contribution based on what they consider other relevant factors. These factors include number of other children in private school or college, high medical bills not covered by insurance; the cost to a family to take care of an older relative who lives with them; and loss of income or job. If a family fits into any of these categories or has other unusual circumstances they should bring this to the attention of the financial aid office as soon as possible.
Finally, it is worth noting that a financial aid office will not tell you what they would have given you if you had applied under different circumstances. They simply inform you of their offer and you have the choice of accepting or rejecting it. Consequently, it is critical to put your best foot forward the first time you apply.
What is the process for applying for financial aid?
The first thing to do is check with the schools to which your son or daughter is applying. The process for applying for financial aid to a private high school is not as standardized as applying for aid to attend college because many of the schools attract a very local student population and will use their knowledge of the community in making their decisions. Colleges are looking for and attract a much broader based student population so they use a more standardized approach.
Each school has their own forms and deadlines. Make sure you complete the proper forms and meet each school's deadline. Many schools now use a standardized form known as the SSS, or School and Student Service for Financial Aid form. Ask the financial aid office if they use this form and if so, how to obtain it. Once it is completed, it is sent to a central processing office which sends reports to all the schools you list on the form including yourself if you wish. There is a charge for each report you request including the one to yourself.
What are the forms of aid? Private high schools generally offer aid in the form of outright grants or scholarships which reduce the cost to the family and do not have to be repaid. Some schools participate in loan programs which they offer to parents to help them pay for their portion of the tuition, room and board. Please check with the financial aid office of your school to see if they participate in one of these programs.
How does having a child in a private high school affect financial aid for college? Many colleges will take into account the fact that you are paying a private high school tuition for another child when determining financial aid. (They do not consider the fact that you had previously paid private high school tuition for the child who is actually applying to college as you will not be paying that private high school tuition when that child is in college.)
How can a family afford college if they send their child to private high school? The general rules that are mentioned above apply to college financial aid as well. Therefore, if you qualified for financial aid for high school there is a good chance that you would qualify for financial aid for college as well.