Funding the Future

Many parents think that tuition insurance is a waste of money or that they really don’t need it. I suppose that if you happen to be fabulously wealthy, losing $30,000 or $40,000 because your child has to withdraw from her private school might not be a big deal. But for the rest of us, that's real money.

Here’s why you are required to take out tuition insurance. When you sign the contract with the school, you are responsible for the annual tuition, room and board charges for the academic year. The school will have operating expenses which it must honor regardless of whether your child completes the full year or has to withdraw after the second month.

To protect themselves most schools offer you two options: you can pay the entire year’s tuition, room, and board in one payment by July 15; if you opt to pay in two installments or in monthly payments, then you will be required to purchase tuition insurance. The school has to know that the fees on which it is counting to balance its budget will indeed be there. Regardless of whether or not your child is at school or has withdrawn.

Here is how one tuition insurance provider explains the concept:

"The cost of a private school education is a substantial investment. The Tuition Refund Plan provides insurance to protect your investment. Because student withdrawals are sometimes unavoidable, the Tuition Refund Plan is a welcome resource for families who must

An SFO is a Scholarship Funding Organization. Basically it is an organization which provides financial assistance for attendance at private school. Each SFO is a legal entity with its own rules and governing regulations.Always ask if an SFO has been set up in your state. Scholarship Funding Organizations are permitted by an act of the state legislature and allow corporations to donate tax-deductible funds for K-12 scholarships.

Arizona Independent Schools Scholarship Foundation
The Florida Tax Credit (FTC) Scholarship Program
Georgia Tax Credit for Private School Costs and Scholarship Donations
Illinois—Education Expenses Credit
Iowa—Education Tax Credits
Iowa—School Tuition Organization Tax Credit
Louisiana—Student Scholarships for Educational Excellence Program
Louisiana—Elementary and Secondary School Tuition Deduction
Maine—Town Tuitioning
Minnesota K–12 Education Credit and Subtraction Program
Ohio—Cleveland Scholarship and Tutoring Program
Ohio—Educational Choice Scholarship Pilot Program (EdChoice)
Pennsylvania—Educational Improvement Tax Credit Program
Rhode Island—Tax Credits for Contributions to Scholarship Organizations
Rhode Island Scholarship Alliance
Vermont—Town Tuitioning
Wisconsin—Milwaukee Parental Choice Program
District of Columbia—DC Opportunity Scholarship Program

Opinion

Private school vouchers are available in one form or another in thirteen states and the District of Columbia. That being so, I wondered whether schools which accept vouchers are subject to state regulations over and above what they normally would be subject to. The National Conference of State Legislatures has a useful State-by-State Comparison of School Voucher Laws which allows you and me to compare the various programs.

Background

Currently thirteen states and the District of Columbia have enacted laws which provide scholarships for students meeting specific conditions so they can attend private school. These scholarships are generally referred to as vouchers. Do these private school voucher programs give parents' the choices they desire? Do private schools' give up their most cherished feature, namely, their independence? How are these programs working? What results are they achieving?

John Stoessel and others make the case for vouchers.

Most voucher programs have good intentions. They seek to give parents options in a specific set of circumstances. Sometimes the state voucher law is written to give vouchers to students with a learning disability. Other laws are written with low-income families in mind. Interestingly enough there seem to very few conditions which the private schools accepting vouchers have to meet. If the school merely accepts students without being concerned as to the source of their funding, the school apparently does not have to sacrifice any

Financial Aid 101

What is financial aid?

• Financial aid is money given by individual private schools to help families pay for a private school education.
• Private schools give families millions of dollars annually to help them afford a private school education.

What is the purpose of financial aid?

• Financial aid is one tool private schools can use to make their school more diverse.
• Yes, many years ago, private schools had a less-than-positive reputation for being elitist.
• However, thankfully, times have changed.

Being able to pay for a private school education is no longer the only admission criterion that matters. If your child has the qualifications that the school is looking for, but you cannot afford to send her, then financial aid is certainly an option that you need to explore.

Read what one of the most prestigious private schools in the United States of America has to say about diversity:

"Andover's broad socio-economic diversity is a hallmark of the Academy as displayed in the inclusive distribution of financial aid grants to low-, middle- and upper-middle-income families."

Phillips Andover, like a great many private schools, has a Need-Blind Admissions policy in place. What that means is that the school does not look at your financial circumstances as part of its admissions criteria.

• Ask whether the school to which you are applying has a Need Blind Admissions policy in place.
• Find out more about how it works.

This video offers a video of the

Most private schools offer some form of financial aid to help offset tuition. Here is how these programs work in most schools. There are exceptions, of course, because we are talking about private, independent schools. Each school determines how it will handle its financial aid program. No local, regional or national association dictates how financial aid programs will work.

First of all, you have to ask for financial aid. If you don't ask, the school will not know that you need financial assistance. Secondly, you will have to prove that you really do need financial aid by documenting your income and assets. That is where the Parents' Financial Statement comes in. Then, the last thing to consider is that most schools have a limited pool of funds from which to award financial aid. That means that you must submit your application for financial aid as early as you can in order to be considered for a financial aid award.

Here is how The Hill School, Pottstown, Pennsylvania describes its financial aid program:

"The Hill School Financial Aid Program offers assistance to families based upon their financial need and the availability of funds. There are no merit-based scholarships at The Hill School. All awards offered are based on the financial/demonstrated need of the family. Accordingly, no student should be deterred from applying to The Hill due to their family not being able to afford the full tuition. Approximately 40 percent of our current student population