What % of your school's tuition revenue supports financial aid?

[Anonymous]

I recently read that the national average is around 10%. Does that mean that 10% of our tuition payments (for those of us who pay full tuition) effectively go to subsidizing other people's tuitions? I'd never really thought about that before, because I always thought financial aid was paid for out of annual funds, scholarship funds, and the like. That's a pretty big chunk of money on top of what we already donate to the school, and it's after tax dollars.

[Anonymous]

I know for our school, there is actually a gap between tuition and the actual cost for educating the kids, to the tune of about $4000. Thus the annual funds etc not only cover that gap but also cover FA.

[Anonymous]

It's more than 10% at most schools more like 25%

[Anonymous]

I looked into some of the financial aid questions one time. Here is some data: https://spreadsheets.google.com/pub?hl=en&key=0AnukIDABt_JKdDdZYXlQbnFUQ0VfMHRpTFp1SUIxS2c&hl=en&gid=7 . I did not make the exact calculation you are asking about, but it seems you could do this calculation from the spreadsheet: [financial aid budget / (tuition * total students)] = % of tuition budget going to financial aid. I ran the numbers on a couple schools, and it looks like the range for this region is about 7-17%.

Note that these numbers look only at tuition vs. financial aid, and do not take into account any extra fund-raising the school or its families might do. As others point out, many people in the education field say there is a gap between revenue and operating costs (when you include financial aid, I assume).

Hope this helps.

Sam2

[Anonymous]

I don't think it's that you pay 110% of what you'd otherwise pay. For some accounting reason I don't really understand, the school budget contains an expense item called "financial aid," which is measured at 10% of tuition. The tuition income item is calculated at 100% of the tuition rate times the number of students. To me, it would make more sense to reflect tuition revenue as whatever amount the school actually receives from tuition, but I guess that's why I'm no accountant.

So it's not that you pay 110% to fund someone else's tuition, you pay 100% and someone else pays 75% and somone else pays 50% and eventually all your payments add up to 90% of the tuition revenue the school would get if everyone paid 100%.

The "gap" is the total expenses (including financial aid) minus the tuition revenue (calculated without taking financial aid into account) divided by the number of students. If the school has a balanced budget, they make up the gap through nontuition income, like rentals of the facility, camp, interest on their investments and the Annual Fund. So financial aid, being an expense, is part of the gap between what it costs to run the school and what the tuition would bring in if everyone paid 100%.

[Anonymous]

Someone posted a link on another thread to a website you can look up non-profit institutions specific asset/liability fundings. It's very interesting. You can see how much went to FA, how much is in the Endowment, how much top officials make in salary and other benefits, the value of the campus or other assets... Of course my computer crashed yesterday and the link is saved in the favorites.

Maybe some other poster will remember the site and repost here.

[Anonymous]

http://foundationcenter.org/findfunders/990finder/

[Anonymous]

Anonymous wrote:I recently read that the national average is around 10%. Does that mean that 10% of our tuition payments (for those of us who pay full tuition) effectively go to subsidizing other people's tuitions? I'd never really thought about that before, because I always thought financial aid was paid for out of annual funds, scholarship funds, and the like. That's a pretty big chunk of money on top of what we already donate to the school, and it's after tax dollars.

You pay like a fool and the administration doles out the goodies to show what forward thinkers they are! What a joke.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I recently read that the national average is around 10%. Does that mean that 10% of our tuition payments (for those of us who pay full tuition) effectively go to subsidizing other people's tuitions? I'd never really thought about that before, because I always thought financial aid was paid for out of annual funds, scholarship funds, and the like. That's a pretty big chunk of money on top of what we already donate to the school, and it's after tax dollars.

You pay like a fool and the administration doles out the goodies to show what forward thinkers they are! What a joke.

You are not required to attend the school. If you don't like the financial aid policies change schools.

[Anonymous]

I wish the schools could be more honest and straight forward. This "gap" business, for example, is completely misleading. Much of the gap at my child's school is closed by the profits made from the summer camp they run. They also make money on the extended day program, though not as much, obviously.

I am totally for providing financial aid ... but I wonder if as much financial aid would even be needed if instead of providing aid to 1 of every 6 students and paying a full time advancement staff of three were changed to providing aid to 1 of every 7 students and having an advancement staff of 1 fulltime and 1 part-time. If the total cost of admission could be brought down just 2 or 3 thousand ("just" LOL) ... that would BE financial aid to a fair number of families. Apparently, I am wrong about all this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I recently read that the national average is around 10%. Does that mean that 10% of our tuition payments (for those of us who pay full tuition) effectively go to subsidizing other people's tuitions? I'd never really thought about that before, because I always thought financial aid was paid for out of annual funds, scholarship funds, and the like. That's a pretty big chunk of money on top of what we already donate to the school, and it's after tax dollars.

You pay like a fool and the administration doles out the goodies to show what forward thinkers they are! What a joke.

You are not required to attend the school. If you don't like the financial aid policies change schools.

Under this inane theory, no criticism is possible w/r/t any voluntary relationship.

[Anonymous]

Anonymous wrote:I wish the schools could be more honest and straight forward. This "gap" business, for example, is completely misleading. Much of the gap at my child's school is closed by the profits made from the summer camp they run. They also make money on the extended day program, though not as much, obviously.

I am totally for providing financial aid ... but I wonder if as much financial aid would even be needed if instead of providing aid to 1 of every 6 students and paying a full time advancement staff of three were changed to providing aid to 1 of every 7 students and having an advancement staff of 1 fulltime and 1 part-time. If the total cost of admission could be brought down just 2 or 3 thousand ("just" LOL) ... that would BE financial aid to a fair number of families. Apparently, I am wrong about all this.

I completely agree with you - especially since I was "priced" out of our private school a couple years ago and financial aid essentially meant not paying the tuition increases. I ask myself, how does it make sense to raise the tuition then give me aid for the increase - versus having more manageable tuition increases. Clearly neither you, nor I, are on the boards of our respective schools ...

[Anonymous]

If one has the resources to pay private school tuition, then please try to be generous of spirit and happy that some percentage of that ability goes to help others less fortunate. And alternatively, if one does not have the resources to pay private school tuition, then please be glad that there are so many generous hearts and is assistance available.

[Anonymous]

For us the issue was transparency. I am all for financial aid, but our old private was not upfront regarding the amont of financial aid being given, the percent of students receiving financial aid, nor the declining fiscal situation of the school.

Some schools are really good about saying even in their informational brochures "we give x% kids financial aid and this is part of our school culture" (e.g., GDS). This is not the case at all privates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I recently read that the national average is around 10%. Does that mean that 10% of our tuition payments (for those of us who pay full tuition) effectively go to subsidizing other people's tuitions? I'd never really thought about that before, because I always thought financial aid was paid for out of annual funds, scholarship funds, and the like. That's a pretty big chunk of money on top of what we already donate to the school, and it's after tax dollars.

You pay like a fool and the administration doles out the goodies to show what forward thinkers they are! What a joke.

You are not required to attend the school. If you don't like the financial aid policies change schools.

I don't think anyone denies your right to question your school's policies, but be aware that there are some schools (British School comes to mind) that offer no financial aid, so perhaps your family would be happier there.

Most of these schools are very hard to get into, and even harder for children who need financial aid. (Schools certainly favor those able to pay full price.) I assume that those receiving aid are very able, indeed, and am happy that our school makes it a priority to assist their parents by offering tuition reduction. In my mind, it's a form of academic scholarship for children who somehow managed to make the cut despite being unable to foot the full bill.