Frequently Asked Questions
Can you tell me how financial aid really works?
A classroom is like a commercial airplane flight, few people are paying the same price. Financial aid is the only area of our economy where you are required to reveal your complete financial picture before the provider tells you what you will have to pay. Everyone is charged accordingly. Knowing ahead of time what your financial aid package would be is a big advantage. Understanding how the formula works will help you pay what you can actually afford.
Do you offer any financial services or products such as life insurance, annuities, investments, etc?
We do not offer those services. However, college funding is part of an overall retirement planning strategy where life insurance, annuities, and investments are important components. It is our experience that few financial planners understand the financial aid system or how to incorporate these strategies into the bigger picture. Once you have an understanding of financial aid strategies you will be able to help direct you own retirement planning. If you would like a reference to an exceptional financial planner familiar with the college financial aid system, we would be happy to share his name with you.
Should we even consider an expensive school?
In fact, many of the expensive schools have more resources dedicated to financial aid than their less expensive counterparts. Many of the expensive schools in fact have more resources to give in financial aid. Take a look at the most generous colleges and you will find some of the most expensive schools. This is just another one of the counter-intuitive concepts you will run into.
What's the role of a Financial Aid Officer?
The mission of the financial aid office is to meet legitimate needs. At today's costs, schools realize that more and more "middle class" families need an adjustment in order to afford sending their children to private schools. It is a mistake for middle class parents to jump to the conclusion that they do not have a legitimate need or that they will never get any aid. The job of the parent is to help the financial aid administrators understand what that true need is exactly.
Why do Private Schools and Colleges even offer Financial Aid?
Read each school's mission statement. Most schools have a stated goal of economic diversity. This means it is their goal to welcome students from a broad range of economic backgrounds. It adds to the quality of the educational environment. Regardless of the price you pay, you are contributing to the economic diversity and thus you are contributing to the school's mission.
Why do I need to know our Family Contribution (FC) amount to navigate the Financial Aid process?
All schools hire third parties to gather financial information on its applicant and report what families can contributie to tuition. This is the only area of our economy where the seller requires you to reveal your financial profile before they quote a price. Knowing that number before you embark on the process helps to adjust your expectations and can help you decide where to put your energy.
What if I have multiple children requiring Financial Aid for their education?
EFC (estimated family contribution) is for a family not per child. In other words the output from the FAFSA, CSS, or SSS will provide the school with a number that estimates what the family can pay. The EFC is then distributed across all members of the family who are in school, including any parents taking courses. It is your job to point this out to a school's financial aid department.
Will I be required to deplete my assets first before any Financial Aid is granted?
With proper planning, you can have your financial aid eligibility determined primarily on your income and you can preserve your assets. The system of financial aid is not intended to wipe out your savings and leave you poor after sending your kids to school. It is also not meant to put you into unsustainable debt. Most parents want to pay for their kids school. The question everyone in the financial aid system is trying to answer is what is the fair amount for each family to pay?
Is Financial Aid available to pay for private education other than at the college/university level?
Just as there is significant help, both financial and informational, for college there is also significant help in the secondary schools. Many of these schools have extensive resources and strive for a socio-economic diversity community. In fact, most money for pre-college comes in the form of grants and thus there is no debt or pay back involved. Some of the most prestigious schools such as Phillips Andover Academy are need blind. In other words, they will admit a student regardless of whether h/she can pay the full tuition. The financial aid office will then offer a package based on what they believe that family can afford. It is our goal to help you properly convey what you can reasonably afford to pay. It is important to understand the process that third parties hired use in their analyses.
What's the one thing I ought to know before embarking on this process?
You should ascertain what your Family Contribution (FC) would be in order to properly navigate the process. All schools hire third parties to gather financial information on its applicants and report what families can contribution to tuition. This is the only area of our economy where the seller requires you to reveal your financial profile before they quote a price. Knowing that number before you embark on the process helps to adjust your expectations and can help you decide where to put your energy.
I probably make too much money to qualify for Financial Aid, right?
Probably not. A huge misconception is that financial aid is only for people making very little money. If you read the FAFSA, people who rely on some public services such as food stamps or other governmental programs are by definition in a different group. Their applications are essentially fast-tracked to receive the full aid available to them. The complexity comes in when evaluating 'middle class' families. The process we focus on aims to determine who in the middle class is eligible and to what extent. Even if you have a lot of money in a retirement account, know that retirement accounts are not used in the calculation of your family contribution. Here is an article worth reading: "Making $300K and getting financial aid for a first grader"
I'd rather not go into serious debt to pay for my child's education. Is that even possible?
Financial aid can be grants, scholarships, work study or loans. Many colleges give significant grants (this is equivalent to them lowering the price). You need to apply and then see what the package is exactly. If it does not reflect your financial capabilities you need to ask them to re-consider and you need to explain why.
Will I be taking away from deserving families who need Financial Aid more than me?
There are billions of dollars of federal money (our collective tax dollars) and school endowments available for financial aid in this country. Moreover, not all of this money is allocated every year.
Who actually receives Financial Aid at Schools?
Theoretically, every student receives aid. Tuitions alone do not cover the full cost of attending any private school or college. Whether you are paying the stated tuition or not, the full cost of the education is subsidized with contributions, annual fund raising, endowment and other resources. Therefore, there is no need to feel badly about getting aid. Every student starts out with "aid"! Furthermore, to maintain an economic diverse community, tuitions being paid vary. If you happen to find yourself with a $10 million windfall, your school is going to expect you to pay more than the stated tuition (through tax-deductible donations). You need to remind yourself this is NOT a consumer/business relationship. You and the school share the same goal -- both are dedicated to educate your child.