<p>CKSABS:
I took the liberty of looking at your previous posts and it is obvious that you are a thoughtful person, since you elected to "defer" your sons admission because you felt that he was not quite ready to board. In that regard, is it possible that your experience in the sense that he is being recruited is more a result of the fact that he is really already accepted and "deferred by choice" to 2009 or is it a result of true "buyers market" conditions as you suggest???? I value your opinion. There are not a lot of thoughtful participants in these discussions.</p>
<p>Pan1956:</p>
<p>Of course, knowing him and having already accepted him helps. However, each school knows about each other. We have been candid from the beginning and they know it will be a competition for him.</p>
<p>Admittedly, he is an excellent candidate, but so are many others. This is why I strongly believe that excellent, full pay applicants will be courted and accepted at a much higher rate this year. </p>
<p>I am sure the contacts from admissions and coaches are a coordinated effort. I know of several students at my son's school who have also been contacted that did not apply or were not accepted last year. The are not necessarily the best students or athletes, but they are all full pay. The school placement director has been doing this for a long time and has never seen the volume of calls to students/parents in the past as this year. This year's admissisions will be very different and many are worried.</p>
<p>CKSABS:
You are the first participant who has colored the situation so strongly in that direction. Most comments are to the effect that there will be no change, especially at the "need-blind" institutions. It is rather sad, because there are loads of obviously motivated and talented kids who post here and who indicate that they need aid in order to attend. For their sake, I hope that the circumstances are not as dire as you suggest.</p>
<p>I don't believe it's as dire as it may sound. I believe the schools know they will have plenty of financial aid candidates. Yes, it will be extremely competitive for aid.</p>
<p>The issue, as you know, is having enough fulls pays apply. Hence, the proactive contact and, perhaps, greater likelihood of acceptance from a smaller pool for those full pays. Schools budget over several years and cannot significantly change the full pay/aid mix overnight. Significantly altering the mix is not sustainable at even the wealthiest schools.</p>
<p>CKSABS:
So if I am correct, you are speculating that there is concern on the part of the schools that the full pay pool is shrinking relative to an expanding FA pool. And if that is the case, then in order to preserve the ratio of full pay to FA matriculants, the schools will arrange things such that the matriculation odds for a full pay are more favorable, all other factors being equal. Am I correct? And are you aware of any evidence beyond the anecdotes that you cite?</p>
<p>There's another way to see it though. I rembmer one of you said something like "if you do have some discretionary money, your child's education may be the best investment you can make" partly because you wouldn't get good returns on most other investments (stocks, real estate, etc.) anyway. I know friends who are having "buyers remorse" saying that they should've sent their children to a private school last year instead investing the money in the stock market; and I read in other forums that more people ARE considering sending kids to private schools this year. My take is that there's a possibility that good private schools both boarding and day could see an increase of applicants (or to cancel out the effect of many people in bad financial situations and reach an even level), but seond/third tier schools may have a harder time getting enough full pay students.</p>
<p>The Bush tax cuts are set to expire in 2011 and there is more and more talk that they are to be repealed in 2009. The top marginal rate then goes from 35 to 39.6%. That change alone will put boarding school out of reach for many families since tuition is paid for with after tax dollars. So intuitively, you would expect more applicants to ask for FA in the next several years on that basis alone.</p>
<p>A factor pulling in the opposite direction, for many upper income families currently using public schools, is that cutbacks to the local schools may make private school MORE attractive in comparison. I think that's more likely to affect day student applications, because that's the closest substitute to a public school (in terms of impact on the family).</p>
<p>Yes, if class sizes at good public schools suddenly soar, I could see some families choosing to bite the bullet, and send their child to a private school. There's always college tuition looming, though. Parents of bright kids may feel their children will do well enough at public school, especially those children mature enough to be interested in boarding school. Oh well, time will tell.</p>
<p>Another wrinkle to this puzzle is the schools' yield rates. Last year, there seemed to be very little movement on the lists. This year? Who knows? I could imagine that the whole situation could take longer to clear this year. Spots might open up much later than usual, leading to students moving from one school to another during the summer.</p>
<p>I don't follow this thread or anything, but I had a question. If you get in on lets say 90% financial aid, is it guaranteed that you get that much for your whole time at the school. Or do you have to reapply every year?</p>
<p>Reapply every year. New income, new tax returns, new assets, new circumstances, new efc, new coa, new award....</p>
<p>Elite</a> prep schools embrace Wall Street, hedge fund risk</p>
<p>...and this article is from March 08, before the "Major" meltdowns.</p>
<p>Neato, would you mind providing your take on this? As you point out, this loss occurred a year ahead of the most recent meltdown!</p>
<p>I really don't value my own opinion on financial matters! I feel I am far too ignorant. Seriously, I barely even know what a hedge fund IS.<br>
But this is the only article I have read to date that mentions the ties between elite preps and wall street. I mean, if the chairman of NASDAQ is (was...don't know) on Groton's Board of Directors, it leads me to believe that they would know when to "get out", so to speak. This is something that I have always wondered about.....these kind of "connections" and how it effects the financial management of the schools. </p>
<p>The article mentions a loss following a surge of 19% but doesn't give a net loss or gain. But it does give a concrete example of the effect of the market (back in March) on endowment. It's the most specific information I have seen regarding a particular school... Down to the name of the hedge fund.</p>
<p>Still, it doesn't answer the question that is the title of this thread. It does hint that the surges before the meltdown helped enable expanding financial aide budgets. makes sense..</p>
<p>For what it worth (which isn't much), that's my take.</p>
<p>I think the boarding schools with big endowments suffered a lot. Most of them have a portfolio of managers---maybe 6 or 7 hedge funds and 6 or 7 long-only managers. With the stock market doing what it did, they probably lost big. And no, there is no way that anyone foresaw this and told them to pull out their money. First, even if someone knew, it takes so long to sell those large amounts of stock, it would have to be a committee decision to fire a manager and sell out---just would never happen. And really, no one knew things would get as bad as the did.</p>
<p>I worked in this industry for many unhappy years before leaving and becoming an ed consultant. I'm not an expert but I can wager a guess that all the endowments lost big. Of course, tomorrow is another day and I think the market is going no where but up this year.</p>
<p>I agree with newyorker22. There is simply no escape in the downturn of this scale. If they have indeed been heavily invested in the stock market, then they must've suffered a huge loss. So newyorker22, what do you think it'll be affecting this year's finaincial aid and admission decisions? Will they cut financial aid amount, set more stringent standards, recruite more full pay students...?</p>
<p>Thank you, newyorker. I feel like I should go buy "The Stock Market for Dummies" or something. Seriously, eveything I know about the market, I learned in 5th grade. Not Kidding.</p>
<p>I heard that the endowment has been invested in a very diverisfied protfolio. So it is not lost as much as general stock market. But there is a significant loss for sure(up to 30%).
I believe that it will certainly impact the FA student. But I don't think they will accept
less FA student because they want to keep the FA student ratio. In stead they might reduce the FA amount, meaning FA per student might be less even though the total number of FA student might be the same. That is my guess.</p>
<p>And also they will increase the tuition. I heard that they will increase the tuition 4-6% this year considering the suffering families. Considering the past increase trend, it is not much increase.</p>
<p>Someone asked what I think the schools will do about financial aid....well I'm not sure, but here are a few thoughts. I've been asking around, and from whta I hear most schools have consistant level of applicants, although some admit to being down, even some have said they are down a lot. Even those who say they are at the same level, say that financial aid apps are way up.</p>
<p>So obviously it will be more competitive for financial aid applicants, and easier than normal for full pays. I've also noticed by full pay clients getting more calls from parents, faculty, etc, than usual, so it seems the courting has started early.</p>
<p>My guess is that the schools will give out a similar amount of aid---I don't think they will cut it much. I think the real story is going to be how they are going to get 60% of the school to be in the full pay category.
Regarding erky's comment, the endowments are all in diversified portfolios, as required by ethics standards, but true diversificiation means that the return should be very close to market return. I read that Harvard was down more than the market, and they have over 30 managers, very diversified. </p>
<p>Well anyway, we'll all find out soon enough what happens here..</p>
<p>I
m so scared- my EFC was $138. Does that dash my hopes completely, because I am such a full pay student?</p>