We find that many schools have questions when it comes to financial aid policies. They aren’t sure if they award financial aid in the most effective way. Schools want to ensure their policies follow correct guidelines, are fair and consistent for students and their families, and support their school’s mission.
When looking at your financial aid policy, always start with your school’s mission. Your mission gives your school purpose (and enables you to be competitive within the marketplace).
Every decision the school makes must keep the mission in mind, including how to set a financial aid policy that’s fair and appropriate for your students.
With your established mission, turn your attention to your financial aid award strategy. This strategy is essential. Any money a school uses to discount or waive tuition for families typically comes from a combination of full-pay families and donors, past and present. This money should be handled respectfully and used strategically for the dual purposes of furthering the mission of the school and increasing the school’s marketability.
We recently created a white paper with five elements to consider when setting your school’s financial aid strategy. This is a preview of one of them.
Ask the right questions about your financial aid budget.
When was the last time you really looked at your school’s financial aid budget?
The budget is often a sticky subject among school finance professionals. For most schools, financial aid is the second biggest budget line. But, because its inner workings are carried on behind closed doors to protect the identity of families, it can be difficult to understand if your school is on the right path.
Decisions about financial aid always vary from school to school, and even by division and grade level. To help determine what course your school should take, have your Board and Financial Aid Committee ask the following questions.
- After total financial aid is granted, what is the net tuition revenue (actual cash) available to pay per-student cost? What percentage of cost does this represent, and how has it increased or decreased in the past five years?
- What increase in your financial aid budget is necessary to allow you to meet the needs of current families and the new families who wish to enroll?
- What are the long-term financial effects of providing financial aid to a student in the early grades and “carrying” that aid into the upper grades?
Use these questions to take a hard look at your financial aid strategy. Weigh your alternatives—considering the particular needs of your school and its families—and decide accordingly.
Download the full white paper, 5 Elements to Consider When Setting Your School’s Financial Aid Policy, to learn more about setting a successful strategy.
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 Private School News Vol. 14 No. 7 FAST Answers to Financial Aid Questions
The Source for Private School News Vol. 14 No. 8 FAST Answers to Financial Aid Questions
Additional ISM resources for Gold Consortium members:
I&P Vol. 36 No. 4 The Three Types of Need-Based Financial Aid
I&P Vol. 37 No. 13 Financial Aid and Competition
