The FACT report tells you a number -- but consider asking parents to stretch a bit more if you feel it is appropriate. Make it your goal to wean families off of the need for tuition aid each year and monitor previous year FACT reports to understand if a family is truly making strides to pay more and more of the tuition bill. We want to see families grow in biblical accountability to their finances, make decisions financially that demonstrate to their children and others that Christian schooling is a sacrifice and a privilege, not a right, and for children to be able to remain in Christian schools through graduation.
One of the most common mistakes we see from parents is that they do not send us the exact documents we have requested in order to complete their verification. Sometimes they interpret “Pay Stubs” to mean W-2’s or they will only send us their Federal Tax Return and neglect to send the state return. All of this can slow down the processing of their application.
While you certainly may look at a family FACT Report at any time, it is important to remember that until you see the words, Status Complete-Verified in red at the top of the report, it is not completed on our end. An incomplete or partially verified form is NOT finished and the results might vary significantly from what you would see on a “Complete-Verified” report. Unfortunately, some schools have inadvertently made tuition aid determinations on incomplete or partially verified reports. This could lead to complications for you down the road or frustration because the numbers do not seem to make sense.
REMEMBER that the same data must be collected and evaluated on each applicant. The same formula must be used for each application’s calculation. The same guidelines and opportunities for exception must be available to all applicants. And finally, the same criteria for award must apply to all.
To help you best communicate the use of CFS to your parents, we have provided the following link to "Best Practice Wording" for school websites. Many sites we have reviewed have inaccuracies regarding the process, contact information, cost, or login info. PLEASE VISIT THIS PAGE ON OUR WEBSITE and scroll to the middle of the page for recommended wording and logos to use.
Schools that have acquired tax-exempt status as a 501(c)3 are required to follow certain
guidelines prescribing how a non-profit gives out money. Two important requirements
are that they have written policies guiding how recipients qualify for a gift, and if the gift
is tuition assistance, that they follow the same criteria and utilize the same formulas for
each applicant. Please read our full blog article, "Is Your Tuition Assistance Program Legal?"
Your goal with tuition aid is graduation, not this year’s enrollment. Families who don’t reduce their spending must put it on a line of credit. What this means in reality is that entertainment, emergencies and miscellaneous are put on credit cards with a revolving balance. When a family’s "Financial Condition Indicator" reaches 75% a family's budget is in a downward spiral. Dis-enrollment is on the horizon.
The typical tuition aid applicant is living on the edge. How long can a family maintain this budget before they have a major bill that ends their commitment to Christian education? This is why the financial wellness of your aid recipients is so important – if your goal is to see them through to graduation.
One of our aims is to help school families have the financial stability to manage tuition payments all the way to graduation. Our comprehensive FACT Reports will give you valuable insight to the overall financial health of an applicant family, allowing you to better serve them, provide financial training resources for them, and to guide them biblically to financial freedom. Share our "Resources for Parents" page with your financial aid families. We have videos, a growing list of valuable articles focused on budgeting, debt management, and more.
CFS refers to Crown (formerly Crown Financial) for budget expense percentage recommendations. The CFS "Financial Condition Indicator" (found on the FACT Report) can help you understand a family’s finances by providing a numeric rating of a family’s current financial condition. This rating is determined by adding together the critical ratios of credit card debt, housing expense, auto expense, utilities, and giving.
Credit cards. As of 2014, there were are over 600,000,000 credit cards issued in the US. The average family has 3.5 cards. The average grant applicant spends 12% of their income on CC payments. It is recommended that 5% of a family’s budget be used for short-term debt payments. Read more about credit card debt statistics in the US.
Housing. As of 2019, the average household income in the US is just shy of $60,000. Because budget recommendations for housing expenses hover around 31% of a family’s net income, this means an average family can afford a home with about a $145,000 mortgage. The typical CFS applicant has a mortgage balance of $154,000 with payments at 33% of their income.
Auto. The average loan amount for a new car was $31,099 in 2017, averaging a $515 monthly payment. Crown recommends auto payments not exceed 10% of a family's household budget. The US average is 14%. Grant applicants are at 13%.
Utilities. Crown recommends 4% (incl. cable and phone). Average grant applicant: 9%.
Giving. Crown recommends 10% of a family’s gross income. Typical grant applicant: about 5%. Our thresholds are slightly different than Crown’s because the “net income” Crown uses already withholds 10% for giving. Try your own finances and see how you rate.
As we enter the summer transition between school years, many parents may have questions about how to fill out their application because of the unique changes that may take place for families during the summer months. A general principle to communicate to them is this: the application is most accurate when it represents what the family's financial situation will be over the course of the school year.
Here are a couple examples: If a family has child-care in the summer, but not during the school year, they should indicate that amount averaged out over 12 months. If they are about to pay off their car in July, they shouldn't include the car payment as an expense.
In doing this, the family paints the most accurate overall picture of their financial situation, allowing you to make the most effective decisions with your tuition aid.