Your Board holds the responsibility for developing your school’s financial aid policy. The Board should write a strong statement that sets fundamental policy, based on your school’s particular mission and budget guidelines, as well as careful calculations of per-pupil cost, retained earnings, and incremental costs.
To develop an effective financial aid policy, your Board must:
- Decide on the specific, mission-based purposes of aid at your school. A general policy statement could begin, “Our financial aid program is designed to provide ______________.” As you set tuition and budget for aid each year, refer to your Board’s policy statement for guidance.
- Evaluate different types of aid. There are three basic types: merit scholarships and other discounts, tuition remission/reduction, and need-based aid.
- Specify the amount to be allocated in total and to each type of aid. Some schools determine the total amount of aid available by basing it on a specific number of tuitions—for example, 10 full-tuition grants. These 10 grants can then be divided into 20 partial-tuition grants, or five full and 10 partial grants, or any combination based on student need.
- Determine which application process your school will use. Require families to apply for financial aid every year. Some schools design their own application forms. Some prefer to use a financial aid service, like ISM’s Financial Aid and School Tuition (FAST).
- Stipulate guidelines for awards. Revise the guidelines year-to-year if prudent, depending on your school’s situation. For example, you may provide aid by grade (“We will only offer aid in the upper school”) or by a percentage of need (“We will award up to 50% of demonstrated need”).
- Develop guidelines on accepting late-summer applicants for financial aid. If you still need to fill seats in the summer, marginal income is better than no income at all. Accepting late applicants can benefit all parties—as long as guidelines provided by the Board are observed.
For more information and guidance, see ISM’s book, Tuition and Financial Aid: A Guide for Private Schools. Or, if looking for specific information about financial aid policies, try our archived webinar, Creating Financial Aid Policies to Reflect Your Mission.
Additional ISM resources:
The Source for Advancement Vol. 12 No. 3 Your Financial Aid Formula: Does It Match Your School’s Mission?
The Source for School Heads Vol. 11 No. 1 A Conversation About Financial Aid, the Second Biggest Budget Item
Additional ISM resources for Gold Consortium members:
I&P Vol. 37 No. 13 Financial Aid and Competition
I&P Vol. 36 No. 4 The Three Types of Need-Based Financial Aid
