<p>FA Considerations:</p>
<p>I think the new direction for FA parents will be to perform a more detailed analysis of the likelihood of becoming a grant recipient. It’s interesting that many parents, regardless of tuition payment categories, will slice/dice SSAT scores, and even go as far as comparing Parent Essays to gauge the likelihood of admissions. While there’s certainly nothing wrong with this (if you have that kind of time), the consideration of the FA issue is typically driven by one overly simplistic formula: largest endowments = greater FA opportunities. It may take a bit more comprehensive analysis going forward to gain an understanding of where the dollars lie. </p>
<p>Consider the following:</p>
<p>Endowment per Student: Please stop assuming the largest endowment will automatically yield the greatest FA opportunity. Instead, compare the Endowment per Student ratios for your favorite schools. In doing so, you may note, for example, that Woodberry Forest, THINK Global and the School at Church Farm EPS’ actually exceed some of the most highly coveted schools mentioned on CC* (I’m not necessarily recommending these schools but you get the point). This is a very important metric but often overlooked in the BS world. A comparison of the number of students supported by the endowment may help guage the the abilities of schools to support the financial needs of its applicants requesting FA awards. It also allows for a very valuable comparison for different sized BS.</p>
<p>Strategic Goals: It’s important to understand the upcoming strategic goals of the school as this may place constraints on endowment dollars. Highly ambitious projects may further contain the Operating Budget and force the school and Board to make some tough choices when deciding the allocated FA percentages (bear in mind most capital expenditures have a separate budget so the impact on FA may be negligible).</p>
<p>Gifts to the School: As some financial sectors begin to rebound, be aware of announcements of large charitable annuity trusts and other gifts to the school. Some gifts have percentages that are specifically earmarked for FA purposes and you’d certainly want to note this. Others may flow directly into the Endowment Fund but the income generated may be used to strengthen FA, staff compensation, admin expenses, etc.</p>
<p>Financial Aid as a Percentage of Operating Budget: The most common FA metrics used are the percentage of students receiving FA and the average FA award. Although useful, it may also help to understand each school’s percentage of FA relative to total Operating dollars. One school spends 20% and the other 30%. When applied to the total budget, you may be able to estimate how much is available, when further applied to the % receiving FA.</p>
<p>The Annual Fund: So those contributions do matter after all! More than just a cheerleading, vote with your dollars exercise, an Annual Fund may range 5% - 10% of Operating Budget in a good year. This fund is used to provide resources throughout the school where the need is greatest.</p>
<p>Merit Scholarships: The conventional wisdom around here is that the most desired schools do not offer merit scholarships. Please do your own research. I know of two BS that are VERY frequently mentioned on CC that haves outstanding merit scholarship packages and I’m also familiar some opportunities at less familiar schools as well. </p>
<p>Educate Your Kids: The summer is the perfect opportunity to teach your students about the importance of these variables and how they may play key roles in the dollars available to them in March. Get out the whiteboards and markers. Once they’ve thoroughly digested the concepts, they may have a few remaining questions for their AOs for comparative purposes. I’d love to be a fly on the wall when your DC asks if the school’s year-over-year reduction in the percentage of dollars allocated to FA represents a slight shift away from its strategic commitment to diversify its student body (just kidding but you catch my drift). And once your DC is done helping the AO up off the floor, they will realize that they there are well on their way to defining a new trend. </p>
<p>*source: boarding school review.com</p>