So, how do schools determine who ‘needs’ financial aid and who doesn’t?

Indeed, financial aid can be a mystery.  But it shouldn’t be. Transparency about policies, procedures and priorities is indicative of a well-run program that aims to take away the mystery.

It should be noted that part of the mystery is that different ‘types’ of schools have different types of programs but if families don’t recognize the difference in schools, then the differences in programs can contribute to the confusion.  

For what follows in this article, the type of school is a non-profit, independent school. Other types of schools that aren’t included in what follows include private schools, for-profit schools, and Roman Catholic schools. So, step one to unraveling the mystery of financial aid is to know to what kind of school you are applying.

Almost all non-profit, independent schools offer what is called a ‘need-based’ financial aid program.  That is, families must annually go through a process to demonstrate that they ‘need’ financial aid in order to afford that school’s tuition. With limited exceptions, independent schools are not offering funds (aka scholarships) for academic excellence, athletic prowess, or demonstrated success in the arts. Their goal is to build a socio-economically diverse student body; after all, who wants to send their child to a school with only children whose parents can easily afford tuition? Diversity—in all its many manifestations—is a hallmark of an independent school education and experience.

So, how do schools determine who ‘needs’ financial aid and who doesn’t? Almost all schools use an outside vendor to make this determination on their behalf.  The school works with the vendor to build a complex formula that reflects the school’s values, policies and priorities, and these objective, third-party companies provide the analysis to determine what a family can afford to pay towards tuition.  Some key assumptions are made during the financial aid process:

The family is prioritizing tuition in their resources.  If a family has chosen to pursue an independent school education, the formula assumes they will prioritize paying tuition over other optional expenditures such as saving for a second home, buying luxury cars, expensive annual vacations, or aggressively saving for retirement and/or college.

Both parents are working.  If a family can not afford an independent school tuition on one income, it is expected that the other parent will seek employment.  Exceptions are made for a parent who must care for an elder relative living full time in the home or a child not yet of school age. Absent an extenuating circumstance, most schools will not underwrite a parent’s choice to stay at home when there is no need.

All biological parents are responsible for tuition. Unless one parent is completely absent, missing or unknown (which usually requires a notarized letter from the other parent), both parents are liable for tuition and before any financial aid is considered, both parents must complete an application. Schools are not bound by agreements between parents, divorce settlements, or other rulings.

At the end of the day, financial aid programs—and the donors to the school that fund them—are interested in a socio-economically diverse student body and providing assistance to families who the school would love to see in their community and believe have much to offer but who couldn’t otherwise afford the cost of tuition.  Financial assistance then becomes another manifestation mission, institutional values, and of the strong partnership and mutual trust between home and school.