The Aid Bucket Challenge

September 16, 2019 EMA Team

The Aid Bucket Challenge

by Alisa Evans, Director, Business Development, SSS by NAIS

I do believe independent schools are potentially changing the trajectory of the lives of the children who benefit from financial aid. Today, however, my work is as much about enrollment management and serving families seeking an opportunity they may not have considered in the past as is it about helping underprivileged students.

As illustrated in the chart below, the face of the financial aid family has evolved over the past 10 years. The pattern we see at SSS is that low and middle income families are underrepresented in seeking financial aid, while high-income families are overrepresented.

In practice, the “traditional” financial aid family is actually becoming less and less likely to get the help they need as the higher income families tip the scales in increasing ways. Given this, it is critical for admission and financial aid offices to use data to determine the school’s aid profile and devise more efficient ways to evaluate this increasingly complex group of families in the financial aid applicant pool.

Percentage of Families Applying to Independent SchoolsHere is an approach I recommend to schools for managing financial aid complexity and volume:

Break up your financial aid applicants into four buckets; review and take action on them 

Ability to pay is above tuition (new applicants)

The bulk of the applicants in this folder likely will not qualify for financial aid. First, ensure that no one has accidentally misrepresented their income because of an extra zero (example: Parent says they make $200,000 vs. $20,000)! The remaining applicants in this bucket clearly have the ability to pay tuition, so why did they apply? Millennial parents have grown up in an environment where their parents applied for financial aid, so they give it a shot. Others may have extenuating circumstances that are not reflected in the application (e.g. just lost a job).

Change is >15% above/below last year (returning families)

Review this bucket next, because it will quickly identify your returning families that have had significant changes year over year. Review the year- over-year data to identify the change and assess if the school can adjust to meet the new need.

Insignificant change above/below last year (returning families)

This bucket should contain the vast majority of your returning families. For many families, incomes do not change much year over year. If tuition will increase by 3%, one approach would be to simply increase the award at the same rate of the increase in tuition and match them at the same level.

Ability to pay is zero or worse (new applicants)

You now have the challenging task of reviewing what budget remains and how much you can offer to full need families. Having good direction from your board/ head on how many full need families you can sustain will be critical when approaching this group. 

Report to your head and board

Now it is time to report on your portfolio: those who applied, those who were awarded aid, and those you could not serve.  

As anyone responsible for managing and awarding aid will tell you, independent school financial aid families are complicated! While utilizing this “bucket” method will not solve your resource challenges, I hope it will help you make quick sense of each and every folder.

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