Answering Private K-12 Financial Aid Formula FAQs

According to recent data from the National Association of Independent Schools (NAIS), roughly one-quarter of students at private day schools received some amount of financial aid over the course of the 2022-23 school year.

So, who determines which students receive tuition assistance, and how does the average private K-12 financial aid formula work? In this blog, we answer critical questions surrounding how to finance a private education and how administrators can make their process more efficient for all.

For Families

Schools work hard to help families manage the tuition costs for a student’s education. Many schools offer financial aid workshops to walk families through applying for financial aid, grants, and scholarships. Let’s look at how to best prepare for and complete financial aid applications.

What Does Financial Aid Cover?

Financial aid is a need-based subsidy designed to help families cover the cost of private school education. Schools and organizations offer financial aid to ensure they attract talented and diverse students from various economic backgrounds, not just those who can afford full tuition. Most commonly applied to tuition, in many cases financial aid can also be used for additional expenses such as school trips, extracurricular activities, and textbooks.

Aid most often takes the form of grants, scholarships, or tuition reductions. Unlike loans, financial aid doesn’t have to be repaid.

What Is the Private K-12 Financial Aid Formula?

Each private school will have its own criteria for financial aid allocation, but at a basic level this formula determines the award for each family.

Cost of Attendance (COA) – Estimated Family Contribution (EFC) = Financial Need

Let’s break down what all this means.

• Cost of Attendance (COA): This is the total estimated cost to attend the private school for one academic year. It includes all applicable expenses, e.g., tuition, fees, room and board, books, supplies, and transportation. Most schools will have little COA variance between each student.
• Estimated Family Contribution (EFC): This is the amount of money the family is expected to contribute towards the student’s education. It is determined by the family’s financial situation, including income, assets, and expenses. Private schools often use a reputable third party to calculate this figure.
• Financial Need: Once the EFC is subtracted from the COA, what remains is the family’s financial need. This is the amount that schools will attempt to cover through financial aid programs, but in some cases, awards may not cover the entire financial need.

How Is Estimated Family Contribution (EFC) Calculated?

Admissions teams use a variety of factors to determine what portion of the COA each family can reasonably be expected to cover.

1. Household Income: Schools assess all sources of familial earnings, including single- or dual-income, alimony, rental properties, and/or investments.
2. Assets: In addition, schools consider a progressive percentage of a family’s assets, such as savings, investments, and land value. In translation, higher-income families are expected to contribute a higher percentage of asset valuation toward tuition. Retirement accounts, like 401(k)s or IRAs, are generally excluded from the calculation.
3. Family Size: The number of people in the household and the number of children attending private school or college impacts the EFC, with larger families likely expected to contribute less per student than smaller families.
4. Unusual Expenses: Schools may take excessive medical bills, care for elderly relatives, or other extraordinary expenses into account.

This is the most critical part of the private K-12 financial aid formula, so schools will encourage families to share as much financial information as available to get as accurate a picture of need as possible.

How Do I Complete a Financial Aid Application?

For most private schools, the family financial aid application requires a standardized process resembling the Free Application for Federal Student Aid (FAFSA) application for college loans and grants. As mentioned, these applications usually ask for detailed information about a family’s income, assets, debts, expenses, and other financial commitments to determine each family’s ability to pay education costs.

It’s crucial to apply early, as financial aid is sometimes given on a first-come, first-served basis, especially in schools that engage in rolling admissions. Deadlines and required documents vary by school, so make sure to stay informed about the application process and timeline.

The SSS Family Portal enables households to apply for financial aid at multiple schools using the same standard financial aid application. Since all schools in the portal use the same application, the bulk of this application must only be filled out once, although schools may include a few custom questions. The resulting offers from multiple schools help families make informed decisions on where to send their children.

What Documents Will I Need?

The EFC portion of the private K-12 financial aid formula requires the verification of all relevant financial information, so part of the application process is to submit supporting documentation.

Requirements may vary from school to school, but families are generally required to submit a combination of the following.

• Tax returns from recent year(s).
• Income statements, via a combination of W-2, 1099, or 1040 forms.
• Current financial information, reflecting balances of savings and checking accounts.
• Business ownership documents, reflecting income and commercial valuation. Examples include Form 1040 Schedule C, E, or F, and Forms K-1, 1065, and 1120-S.

You may need to upload additional documents proving parent and student identity, clarifying unusual expenses, or elaborating on extenuating circumstances. Read the process to upload supporting documents on SSS here.

What Happens After I Submit a Financial Aid Application?

After submission, the financial aid office reviews the applications and documents, using the private school’s K-12 financial aid formula to determine how much assistance a family is eligible to receive, based on the EFC and the school’s available resources.

Some schools have larger endowments, which allow them to meet a family’s entire demonstrated financial need, while others may only be able to offer partial aid. In these cases, families may need to find other ways to cover the remaining costs, such as taking out loans or finding scholarships through third parties.

Once made, decisions remain private between school and family.

Can I Appeal Decisions?

Procedures will vary by school, but in many cases, parents can appeal a financial aid decision, especially if circumstances radically change financial situations. For example, job loss, divorce, or unexpected medical expenses may reduce a household’s EFC to the point where a school would offer additional aid.

Talk to the school office to learn the official process and have documentation ready to support your request.

For Financial Aid Directors and Administrators

Running a school’s financial aid department involves many moving parts, so set your teams up for success with quick, accurate decisions. With instant access to applications and supporting documents, fast tax document verification, and swift financial contribution calculations, your team is able to increase the number of applications considered and free up time and resources to help you better serve your students and families.

How Do I Make It Easier for Families to Apply for Financial Aid?

Applications should be as easy as possible to submit – take advantage of a standard financial aid portal that requires families to only make one submission. Any additional required information can be collected through follow-up communications, but it’s important to prioritize that initial submission.

With the SSS Admin Portal, individual schools can see overviews of each family who applies, run financial data through their calculations, and determine financial need from a single platform.

How Do I Eliminate Human Bias from Financial Aid Decisions?

It is important for schools to use unbiased financial aid formulas and practices. One of the benefits of using a third-party methodology from trusted experts is that parents can be assured there is no bias in calculating a family’s need to determine financial aid awarding amounts.

How Do I Shorten the Time to a Decision?

Shorten your school’s financial aid processing to benefit both parents and staff. With SSS, the family application is the cornerstone of our financial aid process. Families submit the application and grant SSS permission to analyze their financial information. Using the research-based formula built and maintained by NAIS, we estimate the amount the family can contribute to school expenses and forward that estimate to your school. This streamlined process gives schools all the information needed to simply review student folders and make award decisions.

A faster process lets parents hear a decision quicker, allowing them to better plan finances ahead of admission. For the school itself, the automation and reduced decision times free up staff to address additional priorities.

Conclusion

While the cost of private school can feel high, financial aid can make it accessible to a wider range of students, opening the door to enriching academic opportunities. Understanding how the private K-12 financial aid formula works should help parents better prepare for what to expect and how to receive the most assistance possible.

Learn why families and administrators alike trust SSS to quickly and fairly handle financial aid applications.