Funding the Future

It's certainly fun to navigate different private school sites and see what's out there. And you must do that, not only on your own but with your child. For all sorts of good reasons. Remember: your child needs to buy into this important decision. It mustn't be a unilateral decision unless the circumstances are exceptional such as your requiring a school for special needs or a therapeutic school. In those situations, obviously, you know best and will make the appropriate decision for your child.

There's another consideration we parents need to review carefully as we decide which private school is the best one for our children. And that's the cost. But don't just look at the price! Why? Because there are several factors in play when it comes to paying for a private school education.

1. Financial Aid

Depending on your financial situation the school may offer you a financial aid package. This could well have the effect of making that school that charges $25,000 a year as affordable, for example, as the school which charges $18,000 but offers no financial aid. So, ask questions and get the answers you need about financial aid. Financial aid programs vary from school to school. Assume nothing. Ask.

This video from the Parents' League of New York discusses financial aid for private school tuition.

2. Tuition-Free Education

The other factor to consider is that you may be able

Financial aid can be very confusing for many parents. You wonder whether you make too much to be eligible. Is there a specific time when you apply? Here are five facts most of us didn't know about private school financial aid.

1. You have to apply for it.

Applying for financial aid at most private schools is a separate process from applying for admission to the school. You also need to make sure that you apply early. This is particularly important if the school has no specific admissions deadline or rolling admissions.

2. You may be eligible for free tuition if your family income is below a certain amount.

Exeter, Andover, Groton, St. Paul's, and Deerfield all have financial aid programs that offer a tuition-free education to admitted students whose income is below a certain threshold. The threshold varies but is in the $60-75k range.

This video reports of free private school tuition.

"Exeter offers $25 million annually in need-based financial aid. Tuition-free attendance is available for families with incomes below $75,000."

3. There is a common application form.

Many private schools use a common financial aid form. This vastly simplifies the process of applying to several schools. You will have to fill out the Parents' Financial Statement (PFS) online at www.nais.org/financialaid/sss. You can also complete a paper version of this application. This will

Money always talks. When you pay cash for something, no matter what that something is, you will get a better deal. Or the vendor will offer a cash discount. Or perhaps you can negotiate better terms. Nowadays the same thing applies to getting into private school. Assuming that your child offers everything the school is looking for, if the school knows that you do not need any financial assistance, you can be virtually assured of acceptance. Why is that? What's changed?

This video reports on the ways that the pandemic has affected schools.

The Perfect Storm

World events have a direct impact on private school endowments. They can shrink as much as 20-30%, even more, when the stock market becomes a bear market. You and I can see how a school's finances are impacted by reviewing their tax returns, the Form 990. 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.

Added to the market conditions are the vast numbers of jobs that have been shed as companies have folded or downsized. That means there are fewer 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

Many parents find themselves facing financial challenges when it comes to paying for their child's private school education. It can be especially difficult when circumstances change unexpectedly, such as a job loss, medical expenses, or a decrease in income. However, withdrawing your child from private school or immediately resorting to public school may not be the only option. Let's explore some alternatives and steps you can take in different scenarios.

Scenario A: Uncertain Job Situation

If you're facing uncertainty due to a job loss or potential layoffs, it's understandable to feel concerned about continuing with private school. Before making any decisions, consider reaching out to the school and discussing your situation. Many private schools have financial aid programs in place to assist families during challenging times. By openly communicating your concerns, you may find that the school is willing to work with you to find a solution. They understand the importance of education and retaining students, so they may be able to offer some financial assistance or flexible payment options.

Scenario B: Unexpected Medical Expenses

When unexpected medical bills arise, and you find yourself in a financial bind, it can put additional strain on your ability to pay for private school tuition. In this situation, reaching out to the school and explaining your circumstances is crucial. They may be willing to reassess your financial aid package or offer additional support. Private schools are often compassionate and understand that unforeseen circumstances can affect a family's financial stability. By having

No doubt about it, private school tuition costs are rising. Some schools seem to be rising at a faster rate than others. Why? What's behind those tuition increases? Unfortunately for many private schools costs of basic goods and services have risen dramatically. Energy costs alone chew up a major part of any school's budget. Faculty and staff salaries and benefits are a substantial part of budgets as well. In order to attract and retain qualified, skilled and experience personnel, you need to offer a decent compensation package with annual increases. Most schools also offer free or substantially reduced tuition for children of faculty and staff.

This video from ABC News discusses the benefits and costs of private school.

Reasons why private school tuitions are on the rise

Administrative costs are one reason private school tuitions increase year over year. Everything from employee compensation to insurance plays a part in this situation.

According to HowMuch.net: "The average cost of private school tuition has grown at a rate that is higher than inflation over the past 20-years. While there are several cost increases that have led to the rise in private school tuition, administrative employee compensation has been the main catalyst for the increases in private school expenses. The rise in the volume of employees who have a larger compensation package than a typical teacher has created the upward trajectory in private school tuition costs.