January: Families Apply for Financial Aid With Application for Admission

After reading the title of this article, you may be saying to yourself, “Nope, we don’t do that. Anybody can apply for financial aid,” and then look elsewhere for other information to help your school solidify your enrollment

Or, you may allow families to apply for financial aid at no out-of-pocket cost, allowing the school to pick up the fee because, after all, you may have a lot of families with financial need, and an application fee is just another fee they have to come up with, and another reason for them to not come to your school.

Those are all good points…but the problem is that there are a lot of points to consider.

Let’s look at them one at a time.

Financial aid applications came about because it has become more and more difficult to afford the full cost of a school’s announced tuition. Note here that announced tuition doesn’t necessarily mean the per child cost of education. Some schools base their tuition on the cost of education (which every school should – but that’s another article for another day), but whatever figure is published is usually an arbitrary number based on several factors – most notably the cost of education and the amount that is appropriate for the market the school is in. If there are families that cannot afford that figure, then an application for financial aid should be handled by a third-party so that all information is securely stored, and that “top line” calculations are made in way that is consistent across the board. Certainly, adjustments can be made due to a family’s particular circumstance, since aid calculations are based on and confirmed by the previous year’s financial data.

Financial aid, however is need-based. If there is no financial need, then the families can be awarded a tuition assistance package that may have scholarships, work-study programs or other means to reduce the amount of tuition the family has to pay to the school. Please note the terminology used in the paragraph. The terminology your school uses may be different; the point is that financial aid is NOT synonymous with tuition assistance. If it helps to get everyone on the same page, create a lexicon which clearly explains the differences in the meanings of the terms your school utilizes. If you award a financial aid package, then you’ll have to find a way to differentiate “need-based aid” from “scholarship awards.” Also remember that earned funds (like work-study, tuition reduction for working a school event or even scrip credits) which inure (that is, directly benefit) a family may be considered as taxable income (check with your local tax advisement professional).

The idea that a financial aid application should be provided at no cost to a family before the student is accepted originated with higher education, in that the FAFSA application for federally-subsidized financial aid loans is offered at no cost to applicants. The difference, however, is that in the case of higher education, the applicant is the student…not the parent.

All that said, let’s break this up into 3 items: the applicant, timing and the cost of applying.

In the K-12 space, the applicant is the parent or guardian. Sometimes, the appropriate individual is the grandparent if they’re the ones footing the tuition bill. Further, FAFSA information is shared with as many colleges and universities the applicant wishes to indicate since a college decision is made with one of the criteria being the amount of financial aid they will receive from an institution. Since there are very few colleges that are struggling to fill their enrollment pipelines with applicants, it isn’t a problem for them to create waiting lists of students – not families. Higher education institutions look to enroll students; K-12 institutions look to enroll families.

As for timing, if your K-12 faith-based school IS struggling to fill its enrollment pipeline with interested parents and guardians, allowing families to apply for financial aid before they have even stepped foot into your school creates a parental decision based on monetary affordability rather than the excellence of the educational environment. Note that there are some financial aid assessment providers that will share their calculation results with families for an additional fee. Some families will pay that amount, especially if they can see how much the company says what the family should expect to pay – like the FAFSA report does. The problem is that you lose the opportunity to enroll this family if your school doesn’t have the resources to completely meet the financial need of the family. When you use a third-party financial assessment provider, make sure that there is NO ability for the family to receive any recommended award amounts directly from the provider. Allowing that option means your school to gives up control of the financial aid process, since the parental expectation has been set.

As for cost, some schools think that absorbing the cost of the financial aid application before the student is accepted as a way to encourage more families to fill their prospective enrollment pipeline. While that sounds like sound logic, what happens if 40 families apply for financial aid that never step foot in the school? Can the school afford an extra four figures to pay for the application fees? Perhaps. If only one student applies, and is accepted, and the parents can pay only $2,500 for that child’s tuition, that could provide a positive return on investment. However, then the amount the parent is paying isn’t necessarily covering what it costs to educate that child.

You may argue that your school would then have the opportunity to recruit students from those 40 families. Even though these families may be trying to determine what their tuition will be before even setting foot in the school, it offers the opportunity to reach out to these families and get them to experience your school. If you’re thinking you need an admissions or an advancement person to do that, you’re on the right track. If you’re thinking you can’t do that because you don’t have time, you’ve just passed up the opportunity to grow your school’s enrollment. Therefore, if your school is thinking of absorbing the cost of the financial aid application, then create a deadline to allow for a “cut off” for the time that families have to apply for aid at no cost to them, and be sure to follow-up with them. After all, in today’s technological climate, there are folks out there that will complete any type of form that is on the Internet that doesn’t have a cost associated with it to try to generate revenue for their Internet-based business, and you certainly don’t want to have to pay a fee for one of those folks that have absolutely no interest in your school.

That brings up another point as to why it’s important to use a financial need assessment provider, and, if possible, charge the fee to the family. If your school chooses to have a provider put a single-page application form on your school’s Web site, and allow the family to apply at no cost to them, Web spiders and bots may complete the application simply because it’s a form. You may get a bunch of garbage in the same way that articles which invite comments on the Web have components now to “prove your are a human,” and that could end up costing your school a significant amount of money if left unchecked.

Then what about those families with significant financial that need who don’t have $40 or so to spend on a financial aid application? If they are enrolling their child in your school, and you know they have financial need (because they told you so in your interview with them), are you only going to award them $30? You’re probably going to award them much more than the cost of the application. Therefore, it is beneficial for the family to apply for aid once they have seen your school and have determined that this is where they want their children to be educated. Further, if parents are complaining about paying $35 to apply for financial aid because that’s a hardship for them, then what happens when they’re expected to pay three- or four-figures in tuition month after month when their children are enrolled in the school?

Further, if they can’t afford $40 for a financial aid application, how are they going to afford monthly payments that may be up to ten times more than that?

What if they don’t want to share all their financial information? They think they have need, but don’t want anyone else to see their financial circumstances, and wonder why you don’t “trust them” with them telling you that they can’t afford your school’s tuition? The explanation is a simple one – there are many families with financial need who want to enroll in the school, and since your school needs to be good stewards of the funds entrusted to them, there is a process that must be followed. The school is a community, and every well-run community abides by “standards” that they set. If the parent wants you to make an exception for them, then they may ALWAYS want you to make exceptions for them. Since the parents are the first educators of their children, is this really a family you want to have as a part of your school community? If you have a process and policy in place that’s been reviewed and accepted by your school’s board or governing body that’s beneficial to fostering positive enrollment gains, then the process and policy should be followed.

Lastly, it’s important to use a financial aid assessment provider that allows your school to maintain control of timelines and deadlines. There are some providers that will guarantee if complete applications are received by a particular date, then the school will be notified of the calculations sometime after that date. This may not be a best practice for your particular goals, especially if you’re trying to grow enrollment in your school, and you want to offer families a tuition assistance package as soon as possible. You need to use a provider that allows you the flexibility to grow your enrollment by using funds strategically. Awarding financial aid is an art, and there’s really nothing simple about it.

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