The Perfect Storm
The impact of the financial markets' meltdown means that endowments have shrunk significantly in most cases. 20-30% shrinkage seems to be the norm, though, of course, it is extremely difficult to unearth any data. You and I will have to wait another year or so until schools have filed their Forms 990 for 2009. Form 990 is the tax return not for profit organizations file each year. Most schools file at the end of their fiscal year which typically is June 30. So we won't be able to examine the 2008 returns until late fall of 2009. The 2009 returns won't generally be available until late fall of 2010.
Added to the financial meltdown are the vast numbers of jobs which have been shed as companies have folded or down-sized. That means there are less parents able to afford private school without at least some financial assistance. Another factor is that many parents who were counting on sending their children to private school are scaling back their spending. The result is that there are fewer applicants for many schools.
The top tier schools are feeling minimal impact as they still have a huge demand for places and relatively strong finances. They can make the adjustments needed to weather the storm. It is the schools which have much smaller savings accounts or endowments and a smaller alumni base on which to fall back which are really feeling the pinch. These schools will jump at the chance to accept a child who does not need financial aid but who offers everything the school is looking for.
"But wait a minute!" you are thinking, "Won't these schools offer a lower standard of teaching, less activities and sports and so on if they are feeling the pinch? Why would I even want to consider sending my child to a school that might have problems." That's the point. Most schools will perform the financial nips and tucks needed to get them through this rough patch. They will put off painting a building or replacing a roof before they will make cutbacks in program areas. So, that should not be a worry.
The bottom line is that more families need financial aid while the money available for financial aid has become tighter. Most schools still consider financial aid a top priority. They simply must fill as many places as they can or face some serious financial consequences. Consequently they will put off other expenses in order to have the funds available to help as many students as they possibly can.
The tight financial aid pool combined with reduced demand for places means that if you can afford private school on your own, your chances of getting your child admitted for 2010-2011 are better than they have been in years. When you go for the admissions interview, make sure that you point that out. If you don't need financial aid, step to the front of the line.
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