Financing a Private School Education

Winter 2014

By Amada Torres

A recent NAIS survey of more than 1,200 individuals who filed financial aid forms underscores the central role financial aid plays in their ability to pursue a private education for their children.

Nearly all those surveyed report that financial aid is extremely important (87 percent) or very important (10 percent) in their ability to send their child to a private school. Overall, 44 percent said that the financial aid they received in the 2012-2013 academic year covered more than half of the school's tuition. Among African-American and Latino families, financial aid played an even greater role — with 60 percent of African Americans and 58 percent of Latinos reporting that financial aid covered more than half of the tuition.

Financial aid also played a large role among families with annual incomes under $50,000. Sixty percent of families earning less than $25,000 a year and 69 percent of those with annual incomes between $25,000 and $49,999 stated that the financial aid they received covered more than half of their children's tuition.

The amount of financial aid received varied widely. More than half the grants were in the $5,000 to $20,000 range, with 23 percent of survey respondents receiving between $5,000 and $9,999, followed by 17 percent receiving $10,000 to $14,999, and 13 percent receiving $15,000 to $19,999.

When comparing these results with those of 2006, it is clear that the grant received per family has increased. In 2006, 37 percent of families received $10,000 or more in financial aid, while in 2012, 50 percent of them had received at least $10,000. Moreover, in 2006, only 3 percent of families reported receiving $25,000 or more, compared to 12 percent of families in 2012.

Given that these subsidies are so substantial, it is not surprising that 71 percent of parents say they would not be likely to send their children to private school if they did not receive financial aid. Seventy-seven percent of African-American families and 80 percent of Latino families who responded shared the same feeling. Among high-income families of all backgrounds, financial aid played a substantial role in their ability to send their children to a private school. Only 16 percent of families with annual incomes of $150,000 or more stated that they would be extremely or very likely to pursue a private education for their children without financial aid.

Demographic Changes Among Aid Recipients


In 2012-2013, 57 percent of the surveyed families received financial aid for one child, similar to the numbers recorded in 2006 (58 percent). Twenty-four percent of respondents received aid for two children, slightly higher than the 21 percent reported in 2006. Financial aid allowed a large number of these children to continue their private school educations. In fact, more than 8 in 10 children of respondents (82 percent) attended a private school prior to 2012-2013 and continued studying in a private school during 2012-2013.

In 2012, the children of the families who filed a financial aid application through School & Student Services by NAIS were slightly more ethnically diverse than respondents in 2006. Just under half of these students were white (49 percent), compared to 59 percent in 2006. African-American students constituted the largest minority group at 18 percent, seven percentage points higher than in 2006.

 

Satisfaction with the Financial Aid Process


Satisfaction with the financial aid process has improved since 2006. Almost two-thirds of respondents are extremely or very satisfied with the amount of aid they received (66 percent), a nine percentage point increase from the 2006 level. This satisfaction level was higher among Latino and African-American families at 72 percent and 71 percent, respectively. Likewise, families with annual incomes of less than $50,000 reported levels of satisfaction around 80 percent.

Perceptions about the role of schools in the financial aid process were also more positive in 2012 than in 2006. About 8 in 10 surveyed parents agreed that the school had treated them fairly in considering their financial/family situation, making the aid decision, determining the amount of aid received, and separating financial need from the decision to admit the child.

The survey also reinforces the importance of financial aid information posted to the school websites. Families reported that the main sources for learning about financial aid were the admissions and financial aid departments (45 percent and 40 percent, respectively), followed by school websites at 24 percent. Website use has increased 15 percentage points compared to 2006, when 9 percent of respondents cited websites as their main information source.

Core Samples

The most recent NAIS numbers show that even though financial aid spending and the number of students receiving aid have increased dramatically in recent years, families receiving financial aid today are paying a greater share of their children's tuition. In 2012-2013, 20.3 percent of all students enrolled in day schools were financial aid recipients, versus 13.7 percent in 2002-2003. However, while in 2002-2003 the median financial aid grant for day students was 59.9 percent of the median day tuition, in 2012-2013 financial aid covered only 56.5 percent of day tuition. These numbers may imply that financial aid awards are trending toward higher-income families.

All of these trends suggest that school leaders need to thoroughly analyze their own school's trends and data when creating budget forecasts, paying special attention to tuition increases and changes in financial aid variables, such as applications, number of recipients, and grant amounts as well as the economic variables and their effects on the finances of current families.

Author
Amada Torres
Amada Torres

Amada Torres is vice president for studies, insights, and research at NAIS.