Financing Basics

The article in the New York Times sounds ominous. Certainly, as it points out, private school endowment funds have seen declines in their value as a result of economic and financial meltdowns. But there are other factors which the article does not address which make the impact on financial aid less of an issue than the writer would have you believe.

Let's look at the facts.

Conservative Investment Policies

The investment approach for private school endowments has historically been a conservative, cautious approach. Trustees and their advisors have generally been good stewards of their finances. They avoided risky investments such as derivatives and real estate despite calls from some quarters to maximize returns. The reason for the decline in their portfolio value is simple: just about every investment-grade instrument declined.

Sustainability

Back in the 90s, sustainability became an important principle in private school mission statements and philosophies. The National Association of Independent Schools has taken a leadership role in supporting all kinds of sustainability initiatives including financial sustainability with its 1,500 member schools.

From the Nais: "In order for independent schools to thrive in the 21st century, NAIS believes that they must be sustainable along five dimensions: financial, demographic, programmatic, environmental, and global."

As a result, schools with significant endowments (greater than $10 million) generally were well-positioned to weather the economic storm which 2009 brought on with a vengeance.

Financial Aid is a Priority

Financial aid goes to the heart of most private schools' commitments to

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 experienced 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.ne: "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.

The point of this article is to make the case for applying for financial aid, even if you think you might not need it. If you can afford to pay private school tuition, you have several payment options available to you. If you cannot afford the cost of a private school education, review Financial Aid 101. It will show you what to do. In every case, ask about financial aid. Private schools have generous financial aid programs. Financial aid is a tool that private schools use to make their school more diverse. Yes, many years ago, private schools had a less than positive reputation for being elitist. But thankfully, times have changed. Being able to pay for a private school education is no longer the only thing that matters. If your child has the qualifications which the school is looking for but you cannot afford to send her, then financial aid is certainly an option which you need to explore.

Le Rosey

Le Rosey, which bills itself as 'the prestigious international boarding school', tops the scale at a princely $114,000 in tuition for 2019-20. Boarding and sundries are not included. The school is located in Switzerland and is owned by a Swiss couple who are 'Les Directeurs'. What sort of clientele enjoys Le Rosey's proximity to some of the best skiing in the world? You guessed it: children of the rich and famous from every corner of the globe. The school does offer some

Whether you are a parent looking to send your child to a private K-12 school or your child is currently enrolled in one, you are probably exploring your options for how to pay for tuition and the other costs associated with a K-12 school. The following information will guide you as you consider the many loan program options available to help you pay for your child's private education.

Tuition Planning

Advanced planning is your best option for financing a private school education. The first step in planning for education financing is to contact the admissions or business office at your child's current or prospective school. The financial aid officers at the school can help you learn about available financing options. Waiting until the last minute is never a good idea regarding financial matters. By starting your research early, you give yourself time to plan to pay for this major expense on the best terms possible.

Today a large number of private school students receive financial aid. Many schools offer financial aid through merit awards and need-based scholarships. Based on eligibility, these awards can help make private school education more affordable. Financial aid grants may cover a significant portion of your child's tuition, depending on the school and eligibility. Knowing what a potential award might be helps you plan your borrowing.

About Private School Student Loans

In addition to scholarships and grants, there is another valuable resource to help you pay for your child's education, particularly when grants and

You have just paid $45,000 for a year's tuition and fees at St. Sedgewick's.

• You are all set, right? Not exactly.
• What happens if your child suddenly becomes sick before the end of the school year?
• What if circumstances beyond your control force you to withdraw her from school in March?
• What if he is expelled? In brief, you are obligated to pay the entire year's tuition and fees regardless of whether your child completes the year or not.

What Are My Options?

The only remedy you have is to sign up for the school's refund plan.

• It typically acts like insurance in the event that your child withdraws before the end of the year.
• The insurance plan will pay for the unused/remaining portion of your child's time at the school.
• You contracted to pay for an entire year when you signed the contract with the school at the time she was accepted.

You do not want to be out of pocket. Neither does the school.

• This is why tuition refund insurance is an important part of your planning for a private school education.
• Tuition refund policies are in place at every private school, regardless of whether it is day or boarding, large or small, elementary/nursery school, or high school.

St. Mary's School in Raleigh, North Carolina, has a policy that is the sort of thing you can expect at most schools:

"To minimize the loss to a family due to early departure or change in