A historical Examination of Financial Aid Trends in american boarding Schools: 1935-2010 1914 PORTER SARGENT HANDBOOKS A Division of Carnegie Communications A Historical Examination of Financial Aid Trends in American boarding Schools: 1935-2010 Copyright © 2012 by Carnegie Communications Daniel P. McKeever Senior Editor PORTER SARGENT HANDBOOKS A Division of Carnegie Communications Table of Contents Introduction 1 1935 Trends 3 1953 Trends 5 1965 Trends 7 1980 Trends 9 1995 Trends 11 2010 Trends 13 Conclusion 15 Financial Aid Trends | Page 1 Introduction Public elementary and secondary public schools have always been part of the fabric of American society, but the United States has an equally long tradition of private education. Despite the availability of free schooling for their children, many parents— since the 1800s—have sought out nonpublic schools in an effort to better prepare their children for college and the workforce. For these parents, finances play an important role in their ability and willingness to choose private education for their families. With this in mind, it is interesting to consider the historical affordability—both in terms of tuition costs and financial assistance granted—in the private school realm. With access to a wealth of private school information that dates back to 1914, Porter Sargent Handbooks is in a unique position to analyze data and assess trends in American elementary and secondary independent education. The Handbook of Private Schools, the nation’s original private school resource, debuted in 1915 and has been an authoritative annual reference ever since. The Handbook lists and describes approximately 1700 of the nation’s top boarding and day elementary and secondary private schools. For the examination that follows, we will focus on seven-day boarding schools as we examine trends in financial aid disbursement over a period spanning 1935 to 2010. Our cross-section of schools comprises 30 institutions from throughout the country and reflects boarding schools of varying levels of affordability. Although not all institutions supplied data for each edition of the Handbook, our overall data set is substantial. The schools to be examined during this project are as follows: • CFS: The School at Church Farm (Exton, PA) • Cheshire Academy (Cheshire, CT) • Choate Rosemary Hall (Wallingford, CT) • Cranbrook Schools (Bloomfield Hills, MI) • Culver Academies (Culver, IN) • Deerfield Academy(Deerfield, MA) • Emma Willard School (Troy, NY) • Flintridge Sacred Heart Academy (La Canada Flintridge, CA) • Groton School (Groton, MA) • Hoosac School (Hoosick, NY) • The Hotchkiss School (Lakeville, CT) • Indian Mountain School (Lakeville, CT) • Lawrenceville School (Lawrenceville, NJ) • Linsly School (Wheeling, WV) • McCallie School (Chattanooga, TN) • Milton Academy (Milton, MA) • New York Military Academy (Cornwall-on-Hudson, NY) • Peddie School (Hightstown, NJ) • Phillips Academy (Andover, MA) • Phillips Exeter Academy (Exeter, NH) • Rabun Gap-Nacoochee School (Rabun Gap, GA) Financial Aid Trends | Page 2 • Randolph-Macon Academy (Front Royal, VA) • St. Andrew’s-Sewanee School (Sewanee, TN) • Saint James School (St. James, MD) • St. Paul’s School (Concord, NH) • Shattuck-St. Mary’s School (Faribault, MN) • Taft School (Watertown, CT) • The Thacher School (Ojai, CA) • The Webb Schools (Claremont, CA) • Western Reserve Academy (Hudson, OH) Financial Aid Trends | Page 3 1935 The United States economy was in dire straights in the mid-1930s. In the wake of the Great Depression, which hit the country hardest between 1930 and 1932, the US was still experiencing a high unemployment rate of about 20% (down from a Depression- era high of approximately 25%). Despite signs of hope and turnaround during these early years of the Franklin Delano Roosevelt administration, economic progress was slow. How did private schools respond to the financial needs and constraints of their student bodies? With tough economic conditions and a Gross Domestic Product (GDP) of merely $73.3 billion, it is not surprising that 1935 tuition and boarding fees for our selection of Handbook schools ranged from $100 (Rabun Gap-Nacoochee) to $1800 (Thacher), quaint by current-day standards. The schools in our survey certainly approached student aid differently during this time. On average, 22.6% of students received financial aid, but the institutions that supplied aid data that year tended to fall significantly higher or lower than that level. On the conservative side, Shattuck- St. Mary’s awarded aid to 6.8% of the student body and Cheshire Academy 9.9%. Hoosac and The School at Church Farm followed a different path, opting to grant assistance to 55.3% and 58.8% of their students, respectively. It is also interesting to consider the degree of assistance offered to those receiving aid. For the most part, 1935 awards were significant: On average, 60.4% of tuition was covered by financial aid grants. Data was more consistent in this area, with St. Paul’s (45.6% on average), Choate (50%) and Shattuck-St. Mary’s (64.2%) at a similar level, for instance. Notably, two schools, Hotchkiss and The School at Church Farm, gave 100% aid to all recipients. Financial Aid Trends | Page 4 Financial Aid Trends | Page 5 1953 Economic conditions in the US were far more robust in 1953, less than a decade removed from World War II. The GDP of $379.3 billion illustrates the tremendous growth that the economy had experienced since the 1930s. The national unemployment rate that year was an impressive 2.9%. With job prospects, home ownership and optimism on the rise, how did America’s private schools respond to the financial needs of their students? Tuition rates had increased only modestly over this 18-year period. At $350 per annum, Rabun Gap- Nacoochee continued to charge the lowest tuition and room and board, while most rates fell in the $1500-2000 range. Thacher and Choate were slightly higher, at $2100 a year. Perhaps due to the combination of newfound prosperity and fairly stable tuition rates, our sample of Handbook schools showed more restraint in financial giving. An average of 14.2% of students received aid in 1953, down from the 1935 rate of 22.6%. In addition, a full one-third of the schools in this sample who supplied data provided aid to fewer than 8% of their pupils. Unfortunately, total aid amounts were not detailed in the 1953 Handbook, but it is probably safe to say that families were expected to assume a greater share of private education expenses during the 1950s. Financial Aid Trends | Page 6 Financial Aid Trends | Page 7 1965 After a period of slow economic growth in the early 1960s, a boom period commenced at mid-decade. Unemployment was only 4.5% in 1965, and it fell below 4% as the decade concluded. A GDP of $719.1 billion reflects the growth of the US economy. Modest tuition increases continued at the nation’s private boarding schools, with Rabun Gap now up to $800 annually and three schools—Choate, Lawrenceville and Emma Willard—topping the list at $3000. Thanks perhaps to increasingly healthy endowments, financial aid rebounded a bit from 1953 levels: On average, schools awarded aid to 19.1% of their students. St. Paul’s led the way with a 49.1% rate, followed closely by St. Andrew’s-Sewanee, at 45.5%. A healthy average award of 46.9% certainly increased private school affordability during this time. Particularly impressive were Cranbrook and Phillips Exeter, whose aid covered an average of 86.8% and 78% of total tuition, respectively. Coupled with reasonable private school tuition increases, these well-funded financial aid programs made it possible for many more families to consider boarding schools for their children. Financial Aid Trends | Page 8 Financial Aid Trends | Page 9 1980 The United States was in the grip of a quite severe recession in 1980, with a national unemployment rate of 7.1%. While it was up to nearly $2.8 trillion at this point, the GDP would fluctuate up and down in the early part of the decade. Private school tuition and boarding fees continued to rise, but at a reasonable rate. In our 30-school sample, the gap between lowest and highest tuition had closed markedly by 1980. Most tuition rates landed in the $5000-6000 range. Randolph-Macon and Linsly charged only $3995 annually, while Culver topped the list at $6550. The percentage of students receiving financial aid had changed only slightly from 1965: up from 19.1% to 20.7%. Cheshire granted aid to 8.4% of its student body, Cranbrook 10.1% and Saint James 11.9%. On the high end, four schools cracked the 30% barrier: Phillips Academy (31%), Emma Willard (32.4%), St. Andrew’s-Sewanee (34.2%) and Shattuck-St. Mary’s (36.4%). Schools responded to the country’s tough economic conditions by continuing to provide substantial awards to their financial aid recipients. At 49.8%, aid at our cross-section of schools typically covered half of tuition and board. The percentages at most schools climbed well into the 30s and beyond, with only one school—Flintridge Sacred Heart at 13.7%—falling below 20%. On the high end, eight schools exceeded the 60% level, including two—St. Paul’s at 78.1% and Western Reserve at 71%—that topped 70%. Financial Aid Trends | Page 10 Financial Aid Trends | Page 11 1995 Driven by a surge in productivity (aided in large part by the increasing computerization of the workforce), the US economy was growing at a fast clip in the mid-1990s. By 1995, the country’s GDP had escalated to $7.4 trillion. Unemployment that year averaged 5.6%. Inflation was declining in the general economy at this time, but boarding school tuition rates had certainly experienced a spike since 1980. Tuition and board charges typically reached at least the middle to upper teens in 1995, with only one school, Randolph-Macon ($9445) coming in under $10,000.