Financing a boarding school education can be very confusing for many parents. You wonder whether you make too much to be eligible. Is there a specific time when you apply? Here are some facts most of us didn't know about private school financial aid.
1. You have to apply for it.
Applying for financial aid at most private schools is a separate process from applying for admission. You also need to make sure that you apply early. This is particularly important if the school has no specific admissions deadline or rolling admissions. Each school has allocated a specific pool of funds for financial aid. Once it is spoken for, there generally are no more funds in that academic year.
This video explains how to apply for financial aid.
2. You may be eligible for free tuition if your family income is below a certain amount.
Exeter, Andover, Groton, St. Paul's, and Deerfield, to name just a few schools, all have financial aid programs that offer tuition-free education to admitted students whose income is below a certain threshold. The threshold varies but is in the $60-75k range. Why are these highly competitive schools offering free education to children from families with incomes below $75,000? They want to make their excellent educations available to a broader constituency. When tuition and expenses creep into the $50,000 range, only a tiny percentage of American families can afford to attend those schools. Schooling must be free to attract students from families making less than $75,000.
3. There is a common financial aid application form.
Many private schools use a common financial aid form, which vastly simplifies the process of applying to several schools. You will have to fill out the online. You can also complete a paper version of this application, which will be available from school admissions offices.
This video explains how a financial statement works.
4. Most schools have a sliding scale of aid.
You may think you are ineligible for financial aid because your family income is over $200,000. The truth is that you may indeed be eligible for some help. It will depend on factors such as how many children you have at the school. Ask the school.
If you are eligible, are you guaranteed to receive financial aid? Unfortunately, no. The determination of who gets financial assistance rests entirely with the individual schools. Not with SSS or NAIS. Individual schools decide how much money is available for financial aid and how it is awarded. Also, remember that the amount of money that schools have in their pool of financial assistance is dependent on many factors, including the number of students requiring aid, the amount of money that has been raised from gifts and investment income, and the financial aid policies that the board of trustees has determined, among other factors.
5. Most schools have increased the amount of aid dramatically.
Private schools recognize that they must offer more aid to more families in these tough financial times. Changes in employment and shrinking financial resources have meant that many more families who usually might be able to afford private schools are asking for help. Schools have reallocated resources to ensure they can meet the increased demand.
Remember that each private school sets its specific financial aid policies. So, what you may be offered at one school will most likely not be what you will be presented at another.
This video reports on schools increasing financial aid to qualified students.
6. You need tuition insurance.
This is a 'must-have'. After all, you have just paid $52,000 for a year's tuition and fees at St. Sedgewick's. You are all set, right? Not exactly. What happens if your child suddenly gets sick before the end of the school year? What if circumstances beyond your control force you to withdraw her from school in March? What if he is expelled? In brief, you must pay the entire year's tuition and fees regardless of whether your child completes the year.
That is why you need tuition insurance. The insurance plan will pay for the unused/remaining portion of your child's time at the school. You contracted to pay for an entire year when you signed the contract with the school when she was accepted. You do not want to be out of pocket. Neither does the school. This is why tuition refund insurance is essential to your planning for a private school education. Tuition refund policies are in place at every private school regardless of whether it is day or boarding, large or small, elementary/nursery school, or high school.
Each insurance plan has specific conditions and limitations. Read the fine print carefully to understand what you are purchasing.
Financial aid can be a complicated proposition. You may even find it intrusive and embarrassing. The truth is that there is much more at stake, namely, your child's future. So, get your affairs in order. Gather all the required paperwork and forms. Submit everything as early as you possibly can.
7. What about international students?
Financial aid for international students is generally not available. The assumption is that you or your company will pay for your child's education as part of your compensation package. That's pretty standard practice. It's also why you will find international and British-American schools in major American cities. These schools have sprung up to take care of the needs of ex-pats in the U.S. for the short term and who do not want their children to miss any part of their British-style education.
Tuition fees are generally due and payable in two installments: one due in August and the second in December. The typical school year runs from mid-September through early June. Monthly payment plans are also available. Most of these plans simply divide the gross tuition and charges by 10, and you pay that amount monthly.
8. What about borrowing to pay for boarding school?
In the past fifteen years, the emergence of private K-12 education loans has made all types of private school education more accessible. Private student loans are an excellent option that will help you avoid dipping into savings or using high-interest products like credit cards. These loan products, many of which are credit-based, can help you spread out tuition payments and make financing tuition more manageable.
Should you decide to finance your child's education with a private K-12 education loan, there are several things to consider before making your final decision.
Interest rates and fees vary depending on the type of loan you receive. Some lenders offer products with different interest rates based on the borrower's credit history and score, while others offer a flat rate for every approved borrower. Many loan programs may also include an origination fee. This fee may be an out-of-pocket or included in the loan's principal.
Repayment terms and deferment options (when available) also differ between private loan programs. Some loans begin repayment immediately following the school's cashing of the loan check. Others might provide a deferment period during which no payments are required. Some private loan programs allow borrowers to pre-pay the loan without penalty, while others charge a fee if they decide to pay off their loan before the end of the repayment period.
The most important metric when comparing and choosing the right private loan is the APR. The APR, or Annual Percentage Rate, represents the annual cost of your loan and is affected by the loan's interest rate, origination fee (if any), and repayment and deferment terms. Review all aspects of the assumptions and loan terms used in an APR calculation to ensure a true "apples to apples" comparison among loan options. Always consult your financial advisor when considering taking out a loan.
9. Consider free schools and scholarships.
There are only a handful of in the United States. Most were founded many years ago by visionary, community-minded individuals who believed that children from working-class and poor families should have the same educational advantages as children from families with money. These schools have had an enormous impact on society, and the benefits to thousands of students and their families are priceless.
In addition, a handful of scholarships are available for private school students. It makes good sense to explore these options as well.
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