How is financial aid funded?

[Anonymous]

Is it funded purely from donations or also from tuition fee revenue?

[Anonymous]

Money is fungible. Schools can talk about funding sources all they want, but unless the endowment is heavily restricted (doubtful for a k-12) it's just talk

[Anonymous]

Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

[Anonymous]

What PP said. And sometimes donors specifically require their donation be used for financial aid.

[Anonymous]

Anonymous wrote:Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

What you meant was: Tuition never fully covers financial aid. Right?

So, tuition covers some of the financial aid?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

What you meant was: Tuition never fully covers financial aid. Right?

So, tuition covers some of the financial aid?

PP here - if you view money as being fungible, then you could argue that some tuition covers some financial aid, but that's not generally how schools view it.

It would be the rare school where full pay families are actually covering the full cost of the education (I've been involved with multiple schools and never saw tuition covering the full cost per child). In other words, if you're paying full freight, you're not subsidizing the family paying 60% of the sticker price. Your tuition may cover 90% of the actual cost for your child. So the extra 10% for you and the extra 40% for the other family have to come from other revenue streams as I outlined above. I think there are some full pay families (and others) who think the full pay families are, from their tuition alone, helping to pay for other students. That's generally not true.

Again, this is all on a really superficial level and doesn't get into other aspects of a budget that need to be addressed by the school.

[Anonymous]

If all students were full-pay, then tuition would be significantly less.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

What you meant was: Tuition never fully covers financial aid. Right?

So, tuition covers some of the financial aid?

PP here - if you view money as being fungible, then you could argue that some tuition covers some financial aid, but that's not generally how schools view it.

It would be the rare school where full pay families are actually covering the full cost of the education (I've been involved with multiple schools and never saw tuition covering the full cost per child). In other words, if you're paying full freight, you're not subsidizing the family paying 60% of the sticker price. Your tuition may cover 90% of the actual cost for your child. So the extra 10% for you and the extra 40% for the other family have to come from other revenue streams as I outlined above. I think there are some full pay families (and others) who think the full pay families are, from their tuition alone, helping to pay for other students. That's generally not true.

Again, this is all on a really superficial level and doesn't get into other aspects of a budget that need to be addressed by the school.

Can you really say with a straight face that the 50k that schools are charging doesn't cover the cost of that child's education? The facilities at most schools charging that much are nice, but not that nice and the classes are small, but not that small

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

What you meant was: Tuition never fully covers financial aid. Right?

So, tuition covers some of the financial aid?

PP here - if you view money as being fungible, then you could argue that some tuition covers some financial aid, but that's not generally how schools view it.

It would be the rare school where full pay families are actually covering the full cost of the education (I've been involved with multiple schools and never saw tuition covering the full cost per child). In other words, if you're paying full freight, you're not subsidizing the family paying 60% of the sticker price. Your tuition may cover 90% of the actual cost for your child. So the extra 10% for you and the extra 40% for the other family have to come from other revenue streams as I outlined above. I think there are some full pay families (and others) who think the full pay families are, from their tuition alone, helping to pay for other students. That's generally not true.

Again, this is all on a really superficial level and doesn't get into other aspects of a budget that need to be addressed by the school.

Can you really say with a straight face that the 50k that schools are charging doesn't cover the cost of that child's education? The facilities at most schools charging that much are nice, but not that nice and the classes are small, but not that small

Never underestimate the cost of providing robust benefits to faculty and staff to ensure retention.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

What you meant was: Tuition never fully covers financial aid. Right?

So, tuition covers some of the financial aid?

PP here - if you view money as being fungible, then you could argue that some tuition covers some financial aid, but that's not generally how schools view it.

It would be the rare school where full pay families are actually covering the full cost of the education (I've been involved with multiple schools and never saw tuition covering the full cost per child). In other words, if you're paying full freight, you're not subsidizing the family paying 60% of the sticker price. Your tuition may cover 90% of the actual cost for your child. So the extra 10% for you and the extra 40% for the other family have to come from other revenue streams as I outlined above. I think there are some full pay families (and others) who think the full pay families are, from their tuition alone, helping to pay for other students. That's generally not true.

Again, this is all on a really superficial level and doesn't get into other aspects of a budget that need to be addressed by the school.

The bolded part is false for at least top DMV private schools. If you are full pay $50k+ for your child, the tuition certainly covers your child's cost. As you said, tuition is the largest stream of all sources, and usually it is at least 80%. If a full tuition of $50K+ cannot cover the cost of a student, something is wrong with school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

What you meant was: Tuition never fully covers financial aid. Right?

So, tuition covers some of the financial aid?

PP here - if you view money as being fungible, then you could argue that some tuition covers some financial aid, but that's not generally how schools view it.

It would be the rare school where full pay families are actually covering the full cost of the education (I've been involved with multiple schools and never saw tuition covering the full cost per child). In other words, if you're paying full freight, you're not subsidizing the family paying 60% of the sticker price. Your tuition may cover 90% of the actual cost for your child. So the extra 10% for you and the extra 40% for the other family have to come from other revenue streams as I outlined above. I think there are some full pay families (and others) who think the full pay families are, from their tuition alone, helping to pay for other students. That's generally not true.

Again, this is all on a really superficial level and doesn't get into other aspects of a budget that need to be addressed by the school.

Can you really say with a straight face that the 50k that schools are charging doesn't cover the cost of that child's education? The facilities at most schools charging that much are nice, but not that nice and the classes are small, but not that small

Never underestimate the cost of providing robust benefits to faculty and staff to ensure retention.

NCS has a 9:1 student to faculty ratio and a 53k tuition. What kind of benefits do you think they are providing?

[Anonymous]

Any reasonable person understands that full pay tuition typically covers more than the cost of one child due to the generous financial aid programs, perhaps full pay = approx 1.2 children at these schools.

[Anonymous]

Financial Aid isn't funded directly. It is really just a tuition discount. The school will have a policy that states how they determine how much they will give in "aid". For example, the policy could be 24% of total tuition revenue can be awarded as financial aid or tuition discounts. It isn't really funded, just not collected. Then regardless of that number if the school has a defect overall they can chose to pull from the endowment or increase other revenue streams to cover that deficit.

[Anonymous]

Anonymous wrote:Financial Aid isn't funded directly. It is really just a tuition discount. The school will have a policy that states how they determine how much they will give in "aid". For example, the policy could be 24% of total tuition revenue can be awarded as financial aid or tuition discounts. It isn't really funded, just not collected. Then regardless of that number if the school has a defect overall they can chose to pull from the endowment or increase other revenue streams to cover that deficit.

Tuition discount = funding. If I pay $55K and you pay $15K, you are funded by $40K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Tuition never covers financial aid.

Let's say a school has an annual budget of $10 million. The school will have several revenue streams to get to that $10 million - tuition, summer camps, facility rentals, fundraising. Some schools may have an endowment that throws off income as well.

Tuition is the largest income stream, but it would never cover the full budget, hence the other income streams.

Most financial aid is going to be covered by fundraising and income from an endowment.

That's a really crude and simple breakdown of the overall budget picture.

- Former board member of a local independent school

What you meant was: Tuition never fully covers financial aid. Right?

So, tuition covers some of the financial aid?

PP here - if you view money as being fungible, then you could argue that some tuition covers some financial aid, but that's not generally how schools view it.

It would be the rare school where full pay families are actually covering the full cost of the education (I've been involved with multiple schools and never saw tuition covering the full cost per child). In other words, if you're paying full freight, you're not subsidizing the family paying 60% of the sticker price. Your tuition may cover 90% of the actual cost for your child. So the extra 10% for you and the extra 40% for the other family have to come from other revenue streams as I outlined above. I think there are some full pay families (and others) who think the full pay families are, from their tuition alone, helping to pay for other students. That's generally not true.

Again, this is all on a really superficial level and doesn't get into other aspects of a budget that need to be addressed by the school.

Can you really say with a straight face that the 50k that schools are charging doesn't cover the cost of that child's education? The facilities at most schools charging that much are nice, but not that nice and the classes are small, but not that small

Tuition doesn’t cover the full cost of educating each child at any educational institution. That’s what an endowment is for.