Investing in a Boarding School Education (page 2)
- Need-Based Financial Aid
- Tuition Loan and Financing Programs
- Merit Scholarships
- The School and Student Service for Financial Aid (SSS)
- Finding Additional Information
- Financing Solutions for Families (TABS Corporate Sponsors offering loan assistance and other services for families)
There’s no question about it: boarding school is a major investment. Even the cost of applying to schools (with application fees, payment for standardized tests and travel expenses for campus visits) adds up. Some parents compare costs of tuition and board to that of purchasing a new car every year, or a similar material acquisition. But this analogy does not represent a fair comparison. The cost of boarding school is an investment in a child’s future that will yield dividends over an entire lifetime. Parents should educate themselves about the many financing options and tools available that can help make boarding school not just affordable, but a fruitful and meaningful investment. It’s also important to partner with schools and financial aid representatives early in the application process to fully explore all options.
While each school has different policies and plans for financial aid, there are some uniform features. Need-based financial aid is awarded as a gift and does not have to be repaid. This money comes from a school’s budget and families are asked to demonstrate and document their need for aid. A school determines a family’s eligibility based on information submitted on a financial aid form that can be obtained from the school admission office. Most TABS member schools use the Parents’ Financial Statement from the School and Student Service (SSS) for Financial Aid, which is administered by the National Association of Independent Schools. Information about the SSS is available at www.nais.org. In December 2004, an online version of this form will be available. Printed forms can be obtained in November from individual schools. A family can use one form for up to three children and send the same form to up to six schools at once.
Schools determine financial need through consideration of a range of factors including family size; income and expenses; the parents’ assets and current debts; and the child’s assets, if any. The family estimates the amount of discretionary income it has available for education and submits that estimate to the school. The school then determines eligibility for financial assistance. The amount of assistance available varies from school to school, and each may award a different amount to the same applicant.
Tuition loan programs are becoming more common, and are offered through schools, banks, or agencies specifically to finance independent school tuition (See sponsor page for additional information). Loan applications are subject to credit checks and require repayment with interest, though rates may be more favorable than those for other consumer loans. There are also tuition payment plans that allow a student’s family to budget and spread payments over the course of the school year, rather than pay in one or two lump sums. Loans may be offered through the school directly or through a contracted provider. These plans typically carry a service fee that may include tuition insurance.
Students at some boarding schools may also apply for merit-based scholarships that are not tied to financial need. While not as common as need-based assistance and typically highly competitive, these scholarships may require specific achievements in academics, sports or the arts, or may be the result of specific bequests. Families can research the availability of awards that may be offered through civic and religious groups, philanthropic organizations, and employers.
Parents should be sure to understand the conditions or requirements in accepting a merit-based award, whether it is ongoing or renewable, or only for a single year.
SSS is a service owned by NAIS (National Association of Independent Schools) and used by over 2,000 K-12 schools (including boarding schools) and other organizations to help determine a family's ability to pay school costs. SSS helps ensure that all schools use the same methods and objective procedures in evaluating your financial aid application.
The basic application form is called the Parents' Financial Statement or PFS. If the schools to which you apply use SSS, you will be able to get the form from the admission or financial aid offices. Schools typically distribute them to families as part of their financial aid application process and require that they be completed and processed according to specific deadlines.
Some schools may use other applications or forms to determine your eligibility for certain scholarships, grants or loans. Be sure to ask the school or schools you're interested in to get the appropriate forms and deadline dates.
Schools use SSS computations to first determine how much you can contribute. To make the determination, the school needs to know such information as:
- Family size
- Income from all sources
- Savings, investments and other assets (including home equity)
- Children's assets
- Medical, dental and unusual expenses
This information, and much more, is collected on the PFS and shared with all the schools to which you are applying. This way, you need only complete one application for many schools.
Most schools will require that you submit a copy of your most recently completed federal tax return to verify that the information you used on the applications is true and accurate. In certain cases, additional documentation may be requested.
A financial aid package consists of one or more ways that the school meets all or a portion of your demonstrated financial need. Consider this example:
$8,000 Cost of Attendance
-$2,500 Estimated Family Contribution
$5,500 Financial Need/Aid Eligibility
The financial aid package is then put together to meet the demonstrated need. For example:
$4,000 Grant from School
$1,000 Scholarship from Alumni Fund
Sometimes, the aid package is just one type of financial aid program.
Sometimes the aid package still does not meet the full need you've demonstrated. Using the same example, a school with limited funding or a parent who applied after the deadline may provide a package that looks different:
$2,000 Grant from school
+ $ 500 Loan
$2,500 Total Aid
-$5,500 Financial Need
-$3,000 Unmet Need
It may be that resources were expended by the time the application arrived or that the school doesn't have sufficient funds to meet the need of all its students. In either case, the family must find an extra $3,000 in addition to the $2,500 the school determined they can pay, for a total of $5,500.
Contact the admission or financial aid officer at the school or schools you're interested in. Since they provide the bulk of the aid dollars available to families, they are the best first stop for information. They can provide specific guidance on the options, procedures and deadlines appropriate to the school. Since schools vary in their policies and guidelines, don't assume that what is true for one school is true for all. Ask questions.
**This information was provided by the National Association of Independent Schools (NAIS) For more information, visit the NAIS website.
This article was reprinted with permission from The Association of Boarding Schools
© 2004 The Association of Boarding Schools, All Rights Reserved
Reprinted with the permission of the Association of Boarding Schools. © 2004 The Association of Boarding Schools, All Rights Reserved.
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