Is Handing Out Financial Aid Hurting Your Families and Your School?
Your tuition aid program was created in hopes of helping families who don’t make enough money to still be able to afford a Christian education at your school. However, could your aid program be hurting families more than helping them?
The Painful Truth About Financial Aid For some families, financial aid seems to just end up enabling them to perpetuate a financially unhealthy lifestyle and rely on your generosity to enable their children to attend your school. For them, it seems anyways, that tuition assistance is a right. Even if it’s not enabling, it may be compensating – compensating for unwise financial decision-making by families who just don’t know how to better manage their money. Studies have shown that just a little financial education can make a big difference. Where is the difference seen? Six top areas: 1) lower credit card balances, 2) fewer delinquencies, 3) budgeting, 4) saving, 5) less financial stress, 6) fewer marital conflicts.
Did you know that it has been shown conclusively that individuals with high financial stress have more disease and illness than those without financial stress? For school families, this could mean – less money available for tuition. For employees, it could mean more sick days or less productivity. If you’ve been involved in financial aid very long, you know that financial stress is not a low-income curse. In fact, those with the highest financial stress are middle-income families. We often see families with high 6-figure incomes applying for financial aid because of excessive debt and miss-management of funds. But families of every economic level experience this stress. The less educated families are about biblical financial management principles the greater the stress, regardless of income. Incorporating a mandatory financial literacy program into your tuition aid program will yield tremendous dividends. 87% of participants identified personal money management practices needing improvement. Even families that are financially savvy attest to the benefit of being reminded of sound financial management principles. Your Responsibility as a School Are you really making the best use of your tuition aid budget and helping teach your families their obligation before God to be good stewards of the resources He has entrusted to them? Are your telling your school families what it takes for you to operate your school in a fiscally prudent manner? It is important to establish a framework for tuition aid, publish it, talk to your families about it, and then stick to your guns and observe it! Our financial aid analysis program (Confidential Financial Services, aka "CFS") provides various videos and articles for parents that apply for financial aid to your school through our system. Our financial well-being program is based upon scriptural principles. Don’t become a victim school that indiscriminately hands out tuition aid to every family that applies. That is not wise and certainly is not good stewardship. Be wise, and use the recommendations from a non-biased third party service, such as CFS, to vet all of your tuition aid applicants in the exact same manner, This will keep you legally compliant and remove the uncertainty often associated with offering tuition aid awards.
Authored by Clint Holden © SchoolRIGHT, LLC., unless otherwise specified. All rights reserved.