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Unveiling the Mystery: Who Really Applies for Financial Aid at K-12 Schools?

June 24, 2024
Ron Beckman
Director of Education

Have you ever wondered about the diversity of families seeking financial aid for K-12 education? Well, wonder no more! Imagine a kaleidoscope of backgrounds, incomes, and aspirations converging at your school’s doorstep.

Clarity, our financial aid platform that serves over 850 schools nationwide, has the inside scoop on the “typical financial aid applicant.” With a comprehensive dataset spanning from Maine to California, plus Hawaii and Alaska, we can unveil the fascinating characteristics of families who apply for aid.

The Power of Comprehensive Aggregate Data

Picture this: hundreds of thousands of families, each with unique stories and financial situations, coming together to paint a vivid picture of the financial aid landscape. By analyzing this vast pool of data in aggregate, we can identify trends, patterns, and profiles that are instrumental for schools seeking to optimize their financial aid programs. Let's dive into the rich data we've gathered and introduce our “typical” financial aid applicant household applying nationally to a day or boarding school.

Profiling the Typical Financial Aid Applicant Family (National Overview)

Day Schools:

  • Median Household Income: $181,000
  • Median Tuition of Schools Applied to: $38,800
  • Median Financial Aid Award: $20,800
  • Median Percent Total Tuition Awarded: 43%
  • Home Ownership: 73% own their home
  • Business Ownership: 27% own a business
  • 529 Savings Account: 34% have a 529 savings account

Boarding Schools:

  • Median Household Income: $136,000
  • Median Tuition of Schools Applied to: $71,600
  • Median Financial Aid Award: $49,800
  • Median Percent Total Tuition Awarded: 58%
  • Home Ownership: 60% own their home
  • Business Ownership: 23% own a business
  • 529 Savings Account: 24% have a 529 savings account

These figures provide a snapshot of the financial capabilities and needs of families applying for financial aid at both day and boarding schools. However, the value of Clarity data extends beyond these national averages and medians.

Household Income: Diving Deeper

Making financial aid decisions involves considering many aspects of a family's and student's financial situation, but a deeper dive into each of the more impactful points can enhance your understanding and strategy. For example, let's take a closer look at what we can learn by considering the impact of household income on awarding. Analyzing this specific factor can reveal trends and patterns that help refine financial aid policies, ensuring they are both fair and effective in meeting the needs of applicants.

Median Award as a Percent of Tuition Based on Household Income

The scatterplot below offers a compelling visual representation of the relationship between family income and financial aid awards among applicants for day-schools nationally.

X-Axis (Horizontal): This axis represents total family income, categorized into brackets for families making $500k or less.
Y-Axis (Vertical): This axis displays each income bracket's median award as a percent of tuition.
Data Points: Each point corresponds to an income bracket. The size of the point indicates the number of applicants in that bracket.

Key Observations:

  • Inverse Relationship: As family income increases, the median award amount decreases. This inverse relationship is expected as families with higher incomes typically need less financial aid.
  • Applicant Distribution: The scatterplot reveals a higher concentration of applicants in the lower income brackets, signified by larger data points in these areas. This suggests that more families with lower incomes are applying for financial aid compared to those in higher income brackets.
  • Broad Range of Income: Remember that income is only one of numerous factors involved in financial aid determinations. The scatterplot shows that having household income in some of the higher income brackets does not exclude a family’s ability to receive school tuition assistance.

By taking a holistic approach and considering these additional factors, schools can ensure their financial aid recommendations are both validated and transparent. This comprehensive evaluation process ensures that all families, regardless of their financial circumstances, have the opportunity to explore the education that best suits their children.

Leveraging Clarity for Efficient and Equitable Financial Aid Decisions

Clarity offers a modern and sophisticated way of collecting the necessary data from families, providing the most family-friendly application experience in the industry. By automatically pulling verified data directly from the IRS, parents are spared the hassle of manually entering values from their tax forms.

For schools, Clarity combines this accurate data with extremely efficient and easy-to-use tools that help make fair financial aid decisions. Our robust methodology settings allow schools to understand how their financial aid policy decisions impact aid distribution to families.

Additionally, schools can use our policy simulators to sandbox changes to these settings, all while being supported by a dedicated client success manager with years of experience in financial aid at schools. This comprehensive approach ensures that financial aid decisions are transparent, validated, and aligned with the needs of both the school and its community.

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