Recent SSS by NAIS studies show that families value receiving clear and helpful information about financial aid when applying to private schools. Moreover, financial aid applicants tend to feel positively about the process and the outcome. Regardless of whether a family seeks financial aid, the studies confirm that paying for private school tuition requires making sacrifices in other lifestyle areas. Overall, families believe these tradeoffs are worthwhile. Part one of this two-part series focuses on the families applying for financial aid at private schools.
?A higher percentage of families reported receiving financial aid in 2013 compared to eight years ago – either as a result of rising tuition costs or more generous school budgets – according to 2013 and 2006 surveys of parents who filed for financial aid through the School and Student Services by NAIS (SSS).* The survey also showed that a workable and predictable outcome in the financial aid process is increasingly vital for families to afford a private school education.
In 2013, 92 percent of applicant families said they received financial aid from one or more schools to which they applied. That's a slight increase from 2006 when 91 percent of families reported receiving financial aid.
What's more, the findings revealed that the number of families receiving small awards (less than $5,000) declined from 35 percent in 2006 to 19 percent in 2013. At the same time, applicants receiving awards of $5,000 or more jumped from 57 percent in 2006 to 73 percent in 2013.
Parents reported greater satisfaction with the financial aid they received in 2013 than in 2006. Sixty-six percent of respondents said they were either "very" or "extremely satisfied" with the amount of financial aid they received. In 2006, 57 percent reported those high levels of satisfaction.
In the same vein, parents' expectations of the aid they might receive are matching up better with what they do receive. In 2013, 69 percent of parents stated that they received about the amount that they expected or more, compared with 61 percent who said so in 2006.
This mirrors improved parent perceptions about the fairness and integrity of the financial aid process during the same time frame. In 2013, 85 percent said the school(s) treated them fairly when considering their family situations, versus 81 percent in 2006. In addition, in 2013, 82 percent of families said they were treated fairly when it came to separating the family's financial need from the admission decision. This compares with 79 percent in 2006.
Ninety-seven percent of applicants surveyed said financial aid was "very" or "extremely important" to their ability to send their child to private school. In 2013, 10 percent of applicants reported that they would very likely still send their child to a school if they didn't receive aid, whereas in 2006, 16 percent felt that way.
Financing Private School
The 2013 study was conducted, in part, to examine whether families applying for financial aid had changed their approach to paying for school since the Great Recession hit in 2008. Results showed a slight shift in the way applicants arrange their finances to pay tuition over the past several years.
Aside from using the financial aid they receive from the school, the 2013 results revealed that parents are most likely to use their own income (74 percent), personal savings (52 percent), credit cards (16 percent), and gifts from the child's grandparents (16 percent) to pay for tuition. Only 8 percent reported using home equity to help pay tuition costs, compared with 15 percent who reported drawing on this source in the 2006 survey.
Most parents do not use other types of loans to pay tuition costs. Among parents who do, there's been a noticeable shift from seeking loans from banks to seeking them from family. Just 13 percent of parents reported using other types of borrowing to help pay tuition. Of those, 60 percent said they borrowed from financial institutions (down from 66 percent in 2006), and 27 percent said they borrowed from family members (up from 22 percent in 2006). It’s most common to see a family borrow less than $5,000 (32 percent reporting having done so), followed by borrowing between $5,000 and $10,000 (30 percent). These figures suggest that very few parents borrow the full cost of tuition in a given year.
* Of the 6,000 SSS applicants randomly selected to complete an online survey in 2013, 1,229 applicants responded. Of the 2,000 SSS applicants randomly mailed a print survey in 2006, 362 applicants responded.