Last Updated: November 21, 2008

With many public schools systems across the country facing budget cuts and the possibility that the number of students per classroom will grow in the coming years, many parents are looking at private day schools and boarding schools with a fresh eye.

What will parents find? Well, first there's the expense of such schools. According to Troy Onink, the chief executive officer of Stratagee and co-author of Strategy & Simplicity: For Private School and College Funding, private day schools on average charged $15,719 for first grade in 2008–09, $17,659 for sixth grade and $20,198 for ninth grade. In addition, boarding schools on average charged $39,846. Parents sending their children to private day schools or boarding schools may also have to factor in transportation costs, along with building fund and capital campaign donations to their expenses.

Though seemingly expensive, parents can and do get financial aid to offset the expense of private day and boarding schools. According to Onink, the best place to learn about financial aid is at the school's financial aid office. That office can provide you with details about the aid offered by the school as well as information about outside sources of grants and scholarships, he notes in his book. Don't be surprised to learn that there's usually less financial aid for families with children in K–12 private schools, however.

To apply for financial aid, parents will need to complete and submit the Parents' Financial Statement (PFS) and the National Association of Independent Schools (NAIS) School and Student Service for Financial Aid (SSS) forms. According to Onink, most of the nation's independent schools that are members of NAIS and several non-member schools use the SSS to determine your expected contribution toward the cost of the school. For more information on the PFS and SSS, Onink recommends visiting the NAIS Web site.

According to Onink, there are two types of financial aid available: need-based financial aid and merit awards. In his book, Onink notes: "eligibility for need-based aid is calculated by subtracting your expected family contribution from the cost of attendance at the school. If your contribution is less
than the cost of the school, then you demonstrate a need for aid in the amount of the difference." Among NAIS member schools, the average need-based award was $17,295 at boarding schools in 2005–06 and $9,232 at private day schools.

In his book, Onink notes that merit-based awards are available, though rare. In fact, such awards make up less than 3 percent of the total tuition assistance provided to independent school families according to Onink.

To be fair, not all students at private day and boarding schools are receiving financial aid. In his book, Onink notes that about 20 percent of students at NAIS member schools receive some form of financial aid.

What are some ways to increase the possibility of getting financial aid or paying for private day and/or boarding schools? Though "there are simply not a lot of tactics that can be implemented to reduce the out-of-pocket cost of private school," Onink recommends the following:

1. Get a sense of whether you might qualify for need-based financial aid before completing and submitting the PFS and SSS to a day and boarding school. By crunching the numbers offline, some parents might be able to make the necessary adjustments to their income and expenses, thus improving the odds of getting need-based financial aid. (In some cases, small business owners might consider hiring their children as employees as one way to reduce the parent's income, for instance.) In Penny-Wise: Paying for Your Child's Independent School Education there's a table parents can use to determine their expected family contribution given their adjusted gross income and the number of children they have in a private school. For instance, a family with adjusted gross income (AGI) of $50,000 in 2006 would have an expected family contribution (EFC) of $1,112 for one child in private school. By contrast, a family with AGI of $100,000 would have an EFC of $13,833. Learn more about the process at http://www.stratagee.com/.
2. Consider a payment plan. In his book, Onink notes that some schools will offer a tuition payment plan to parents. Be sure to ask the school's financial aid office if such plans are available.
3. Direct gifts for tuition. Onink also notes in his book that some parents and grandparents can benefit from making direct gifts of cash to pay for tuition. The payment must be made directly to a qualified educational institution and must be for tuition only for it to be exempt from gift tax rules.
4. Prepayment of tuition. Grandparents might also consider prepaying their grandchildren's tuition for multiple years in advance instead of the current year. Subject to certain conditions, "multiyear prepayments of tuition are not considered taxable gifts for gift or Generation Skipping Tax purposes," he wrote.
5. Consider a loan. New services are popping up daily that match student-loan lenders with parents. Those sites include Simple Tuition, TuitionBids and GreenNote.