How To Pay for Boarding School

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How To Pay for Boarding School
Because paying for boarding school involves so much money, it makes sense to look at all the options available to you.
I remember wondering years ago how we were going to pay for our daughters' private school educations. It was a major expense then. It is still a major expense today. Back then in the 90s boarding school cost $11,000 a year. Because paying for boarding school involves a major part of the income for most of us, let's look at the options which are available to you.
 
You can pay for boarding school in several ways.
 
By check
 
Fees at most schools are payable in advance. You will receive an invoice with your acceptance letter. Half a year's tuition and other fees are due in  the summer, usually in July or early August. The second half of the year's tuition together with other fees is due in December. Payment dates vary from school to school but most expect payment around these times of the year. If you have your child's boarding school expenses allocated already or have sufficient income to cover two substantial payments a year, then paying by check might make sense for you. Effectively you are paying cash for your child's education. Should you expect a cash discount? It never hurts to ask.
 
 
Don't forget to budget for the other fees besides tuition. Your tuition invoices will not include items such as tuition insurance, fees for supplies used in special courses, textbooks and supplies as well as your child's athletic equipment. Boarding your daughter's horse is not included in tuition. Neither are music lessons. 
 
Plan on paying for expenses such as book fees, laundry, trips, club fees, meal plans and other sundries as well. Health insurance and technology fees generally are due and payable with those half-yearly tuition invoices. However, those details vary from school to school. Most schools will send you a monthly bill for any expenses incurred in between those payments.
 
By tuition payment plan
 
Tuition payment plans allow you to spread the payments over up to 10 months by using the services of a tuition payment plan firm. There's a list of these in the Resources section at the end of this article. In effect the tuition payment plan company pays the schools twice a year as your invoices for half a year's tuition come due. But the tuition payment plan company collects from you monthly. This type of fee payment arrangement helps many people budget their boarding school expenses on a monthly basis as opposed to writing two large checks twice a year.
 
With financial aid
 
Financial is money which the school awards you. For example, say the tuition is $30,000. The school awards you $12,500 in financial aid. That means you will pay $17,500. That $17,500 would be due in 2 equal instalments of $8,750 as explained above. Again, you can use a tuition payment plan company to spread the $17,500 over up to 10 months.
 
How do schools determine financial aid awards? Most boarding schools use the School and Student Services arm of the National Association of Independent Schools. You complete the Parents Financial Statement online (or download it and mail it). SSS analyzes and tells the schools which you have selected what it thinks your contribution should be, based on their analysis.
 
The schools alone make decisions about financial aid. Their decisions are based on three things: the SSS report, the available financial aid pool and their own philosophies concerning financial aid.
 
Pay attention to the deadlines with respect to financial aid. If you miss them, you could miss your opportunity for an award. That's because the financial aid decisions are made on all applications which have been submitted by the deadline. If you miss the deadline, you will most likely discover that the school has allocated its financial aid pool to applicants who submitted their applications by the published deadline.
 
Several private schools have financial aid programs which pay all tuition and expenses for families with income below certain thresholds. The schools which offer those kinds of programs will feature them prominently on their web sites and in their admissions materials. Private School May Be Free If You Make Less Than $75,000 explains how this kind of financial aid program works.  Once again, be aware that financial aid programs vary from one private school to another. What one school determines it can award you may not be the same as what another school might offer you. Each school makes its own independent financial aid award decisions.
 
With scholarships
 
The number of organizations which will give scholarships for students going to private school is growing. I have been monitoring the private school scene since 1997 and am happy to report that there are more scholarship awards in 2013 than there were in 1997.
 
As with financial aid, scholarships are very competitive. Pay attention to all the details in the application and submit your application well in advance of any deadline. My companion article on Scholarships provides a list of the scholarship organizations I know of. 
 
By attending a free school
 
There are just a handful of free boarding schools. But they are worth considering. They really are free thanks to the munificence of some very public-spirited benefactors many years ago. Free Schools describes the programs available at this schools. 
 
 
By borrowing
 
Taking out a loan to pay for private school is an option some people prefer. If you have good credit and a portfolio of assets which you do not want to liquidate, perhaps borrowing the money is the route to go.
 
As always with matters financial, consult your financial advisor or other trusted financial professional. You will be making a major financial commitment when you send your child to private school. You need to make the right decisions. Don't be shy about asking for advice and guidance.
 
Using vouchers
 
Thirteen states and the District of Columbia have voucher programs. These are state-funded tuition assistance programs. For a detailed comparison of the various programs as well as list of the states which currently have voucher programs see the National Conference of State Legislatures' School Voucher Laws: State-by-State Comparison.
 
 
How much money can you expect to receive? Typically the vouchers are the equivalent of what the state would spend per student. The formulas vary from state to state. 
 
Using scholarship tax credits
 
Fifteen states offer scholarship tax credit programs. They are related to the voucher programs insofar as they provide funding for families to help send ther children to private school. The general idea of a scholarship tax credit is that taxpayers, and in some states, corporations, can allocate part of their state taxes to a private nonprofit organization usually called a scholarship granting organization or SGO. The SGO has been set up for the specific purpose of receiving those donations. The SGO then in turn issues scholarships to K-12 students.  The NCSL offers a detailed list describing the various state scholarship tax credit programs. 
 
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Financing

FINANCING OVERVIEW

Don’t let the cost of boarding school deter you. From private loans, to scholarships, there is help available. When is payment due? Does your boarding school offer a tuition payment plan? How much financial aid is available? In this section you’ll find the answers to these questions and more.