Financial Aid Part 2: Financial Aid Management - Who will Administer your School’s Program?

BY SUSAN LAIR, Phd - CONSULTANT, Executive Coach

Financial aid committees play a crucial role in private schools' financial aid processes. These committees are typically responsible for examining financial aid applications, reviewing each applicant's financial need assessment, and making decisions about how financial aid funds will be allocated. Below are components to consider when forming a committee of financial assistance.

COMPOSITION AND EXPERTISE

COMPOSITION

Financial aid committees often consist of school administrators, mid-level managers, the admissions department, the business department, and other individuals selected by the head of school. The composition will vary depending on the size and structure of the school.

EXPERTISE

The Committee should have expertise in finance, education, confidentiality, and longevity at the school, enabling them to make informed decisions about financial aid allocation. Committee member expertise can be found in the following:

Admission Office

POSITIVES

The school’s enrollment is the Admission Office’s principal function and the primary generator of operating funds.
The Admission Office knows more about applicants than any other offices
The Admission Office plays a crucial role in shaping the student body (e.g., gender, ethnicity, race, academic success, extra-curricular talent, mission alignment, etc.)
Provides alignment with Enrollment Management

NEGATIVES

The timing and work involved in spring enrollment and financial aid awards are tricky.
Financial Aid meetings take time away from admissions work
It provides unneeded conflict and anxiety for admission office personnel trying to admit mission-aligned students.
It isn't easy to balance questions from new parents about admissions and new and current parents' questions about financial aid.

Business Office

POSITIVES

The Business Office is experienced in separating business decisions from personal feelings.
The Business Office understands the financial circumstances of current families.
The Business Office has experience speaking to families about their finances.
Better able to align total awards with the overall financial aid budget
The Business Office has more experience in spreadsheets and formulas

NEGATIVES

The Business Office may not be sufficiently staffed to handle additional financial aid responsibilities.
The Business Office does not know new students like the Admissions Office.

Development Office

POSITIVES

The Development Office is experienced in funding programs and will know how much money is available for financial aid.
The Development Office often understands the financial circumstances of many current families.
The Development Office is far enough removed from the educational program that it may be more capable of objective decisions.
The Development Office is experienced in spreadsheets and formulas

NEGATIVES

The Development Office may not be sufficiently staffed to handle additional financial aid responsibilities.
The Development Office does not know new students and their families.

Division Directors

POSITIVES

Division Directors have known individual students and their families for years.
Division Directors know somewhat of the financial circumstances of their division's current families.
Division Directors play a significant role in the acceptance of new students.
Division Directors know the size of classrooms and their teacher's ability to educate a socio-economically diverse student body.
Division Directors have experience working with the Business Office on various budget and other financial-related items.

NEGATIVES

Division Directors may need to rotate on and off the financial aid committee (by year) to allow division business to continue without interruption.
Division Directors are experts in their division and may lack expertise in other age groups.

Lead Faculty and Staff

POSITIVES

Lead faculty and some staff have known individual students and their families for years.
Lead faculty play a role in the acceptance of new students
Lead faculty know their ability to instruct a diverse student-learner population

NEGATIVES

Lead faculty and staff play a vital role in the education of students, and time away from the classroom cannot be replaced.
Lead faculty and some staff may develop varying opinions about particular students' ability to be successful at the school.
Privacy could cause a conflict for lead faculty and staff in knowing the private financial information of families.

Board of Trustees Representative

POSITIVES

Members of the Board of Trustees understand the complexities of the school's operating budget.
Members of the Board of Trustees helped design the financial aid policies and procedures.
Many Board members have served on the Board for 9+ years

NEGATIVES

Having a Board member on the Committee could cause administrators, department directors, division leaders, and faculty to not speak up during the meetings.
The Board members may also be parents at the school
Having a Board member on the Committee may cause a conflict since, from time to time, Board members may apply for financial aid
The need for privacy could cause a conflict for Board members to know the private financial information of families
Determining financial aid is an administrative function under the Head of School
It could cause administrators, department directors, division leaders, and faculty to doubt the Board's faith in their professionalism.

COMMITTEE LEADERSHIP

The Committee is typically led by a chairperson who coordinates the activities of the Committee, arranges meetings, ensures a fair allocation of funds, and guarantees that the Committee follows the school's financial aid policies and procedures. Who should lead the Committee?

Experience – The Chair has usually served on the Financial Aid Committee and has extensive knowledge of the school's financial aid policies and procedures, total funds available, and experience with complicated family circumstances. The chairperson also has experience using the third-party needs assessment tool and the school's appeal process. Data Collection and Analysis – The Chair is responsible for reviewing individual applications, informing applicants of missing information, clarifying with applicants’ various parts of their application, working with the third-party needs assessment firm, overseeing the calculation of an in-house assessment, and providing data analysis for the Committee.

Communication – The chairperson communicates with the Committee's key administrators and provides updates to the Head of School. The Chair also communicates with various school departments like the admissions office and often guides applicants through the process.

Decision Making – The Chair plays a leadership role in the Committee's decision process, ensuring decisions based on the data received in the applications and allocations are reasonably, equitably determined, and consistent.

Adherence to Policies and Procedures, Provides Written Reports, Process Review, and Committee Assessment – The Chair assures that the Committee follows all policies and procedures and, if a question requires guidance from the Head of School. Finally, the Chair provides the Head of the School with a written report detailing the Committee's allocation recommendations, an assessment of the process, and suggestions for improvement.

FINANCIAL AID PROGRAM ASSESSMENT

As I pointed out in "Financial Aid Part 1, Determining Policies, Procedures and the Board's Role," it's essential for the Board of Trustees and the Head of School to work together to determine financial aid policies and procedures. What guidelines will the Financial Aid Committee use? How will the Committee answer the following inevitable questions, and how will the Board assess the program's effectiveness? Below are a few questions to consider.

Did the current financial aid program support the school's mission?

What process was used to review the program?

Did the process adequately support the program's purpose, and were the program's goals achieved?

If the program intended to increase socioeconomic diversity, did the Committee use the bulk of the awards to maintain enrollment (filling empty seats), increase enrollment, or both?
Did the program serve the intended population of students?
Were there student populations that were not adequately served by the school's tuition assistance program?

Was the available Financial Aid budget adequate?

How were awards determined? Ten areas to assess

How well was the privacy of individuals requesting an award assured?
How did the school assess eligibility for non-working, single, and divorced parents?
If the school used a 3rd party firm to determine eligibility and need, how helpful were the firm's determinations?
Was the maximum individual dollar award sufficient? Family?
Was the number of children within a family that received financial aid reasonable? How did the Committee determine which children to award assistance to?
How effective was the reapplication of returning financial aid families?
Did the Committee need to adjust any recommendations from the need assessment service firm? FAST? SSS? FACT?
While financial aid is often an umbrella term used to describe many types of tuition funding, most private schools distinguish between merit-based scholarships awarded on academic or other achievements and need-based funding. How well did the Committee differentiate between the two?
Did the Committee use a different calculation to determine the financial need for employee children? What was the difference?
How accurate was the base cost? Was the base cost assessed to all financial aid families reasonable?

What process was used to determine appeals? Was it useful?

Did the Committee uncover any students receiving unneeded assistance?
What percent of appeals were granted?

HEAD OF SCHOOL FINANCIAL AID REPORT

Determine a process for the Head of School to report the overall financial aid awards to the Board while maintaining individual award privacy. What details does the Board want in the Financial Aid Board Report?

DISCOUNTS AND REMISSION

Understanding the fundamental differences between financial aid and discount and remission programs is essential. If using them, what criteria will the school use: early enrollment, advance payment, multiple-year payments, tiered tuition rates, sibling, parish, or congregation membership, founding family, longevity, and school employee? Questions to answer:

Do particular populations within the school cost less to educate?
How does it help the sponsoring church to have members who may have joined for the school discount?
What advantages exist for faculty who stay at a school because their child receives a discount or remission?
Is financial aid a more equitable approach to need-based aid for employee children?
Could faculty remission be considered a benefit that not all employees receive? Will employees without children receive a benefit in lieu of tuition remission?
How do discounts impact a school's financial sustainability? Hiring?