Private Schools Grapple with Higher Financial Aid Needs

Higher financial aid demands and a new budget-conscious mentality are a few of the effects private schools are left with as the economy recovers. Many private schools were feeling more confident for the 2010-2011 school year as the economy saw some relief. However, even those in recovery mode are not exactly coming out of the recession the same way they went in, said Jim McManus, executive director of the California Association of Independent Schools based in Burbank. “Part of what happened, even at schools with larger applicant pools, is that an increased number of applicants have needed financial aid,” he said, adding that the higher demand is still an issue for many schools. He added that private schools that have had to restructure their budgets also have restructured their overall spending mentalities, which is expected to be more than just a temporary fix. “Most schools are seeing this as a reality, that this is the new normal, and it’s not going to go away, at least very quickly,” McManus said. “So I think they have accepted and embraced it and gotten more skilled at examining every expense and asking if this is essential for an excellent education.” The Buckley School in Sherman Oaks was able to keep its enrollment steady during the recession, even increasing its student body by 20 students through a conditional use permit for the 2009-2010 school year. The number of applicants for the next school year is also higher than last year’s number, so the school is expected to be enrolled at full capacity again, said Lisa Turchan, the school’s chief financial officer. However, what the economy did affect was the school’s annual fund for voluntary giving, and it’s still not quite back to pre-recession levels yet. “We’re down from that, but we’re still in very good shape and it’s building,” Turchan said. “Really the most significant impact is on the (higher) financial aid. … I would say it’s a sign of the initial crash, as well as the slowness of the recovery. At the same time, we’re increasing our price.” Aid increases Turchan said financial aid used to make up only 9 percent of the overall budget but moved up to 13 percent in the 2009-2010 school year. The percentage has stayed steady since then and is expected to remain at that level for the 2011-2012 school year, she said. Budget changes the school’s administrators have made have included trimming down on benefits for employees as coverage costs escalate and delaying hiring for certain vacant positions that do not affect the teacher-student ratio. Turchan said the cautious budgeting is also due to the fact that the school is working on a series of major construction projects. Flintridge Preparatory School has also had to increase its number of available financial aid packages, both for families that have struggled during the economic downturn and for new families that have joined the school. “We went from probably over 10 percent of our budget devoted to financial aid to closer to 13 percent,” said Peter Bachmann, the school’s headmaster. “We simply adjusted and made financial aid more of a priority, so we made accommodations in the budget. It’s more that we didn’t grow in too many areas and we just tried to be particularly cautious about introducing too many new programs, cautious about adding funds to existing programs.” Flintridge Preparatory School has seen some financial improvements. Its endowment fund, which it takes a percentage from toward its income each year, has returned to pre-recession levels at more than $17 million. In 2008, the fund dropped to less than $12 million. The school’s enrollment levels have not been affected and annual giving has grown each year, even during recession times. Bachmann said he has high hopes for the coming year. “We’re cautiously optimistic that the economy is going to grow, and we are optimistic that we’re going to be stronger than ever,” he said. Scrutinizing vendors Private schools have also used other tactics to be more budget conscious. At Woodcrest School in Tarzana, administrators have restructured what they spent on their vendors. They put out new bids for services such as trash collection, facility cleaning and gardening, said Principal Andrea Miller. Administrators at Chaminade College Preparatory, which has campuses in Chatsworth and West Hills, have also been extra cautious when working with vendors. “We’ve asked vendors to sharpen their pencils,” said Rob Webb, the school’s vice president for advancement. “We’ve been very mindful about the bidding process. We’re getting competitive bids, and we’re making vendors understand that schools are making choices.” Webb added that while he believes Chaminade has always been good about maximizing its budget, he said the economy had helped further developed that mindset for his schools and others. “It’s going to stick around for awhile,” Webb said. “This is the new normal.” Download the 2011 SF VALLEY’S LARGEST PRIVATE SCHOOLS list (pdf)