Edstart logo white

Increasing the effectiveness of bursaries and fee concessions


Living costs are the highest they’ve been on record for working Australians and combined with rising interest rates, this is causing household budgets to tighten across Australia. Some parents are facing financial pressures that they haven’t had to think about since they started putting their kids through school.

For families with children at independent and Catholic schools, school fees often take up approximately one third of the family budget. Given the current economic climate, this means there is likely to be a rising need for schools to provide financial assistance to families. Bursaries and fee concessions are traditional methods schools can utilise to provide targeted support for families

Bursaries are financial grants provided to families by schools to support putting their children through education. They are typically based on financial criteria, but can also be given out for academic performance or other specific talents. Bursaries can help cover a range of expenses, including fees, books or accommodation and are a key method for schools to promote access to high quality education.

The role of bursaries for schools

For all schools, bursaries let schools provide pastoral care to students and families. This may be a result of a family falling into financial hardship, a parent losing a job, or may be due to more serious circumstances such as an illness in the family. Reducing school fees is an easy way schools can do their part to help the situation.

However, bursaries can play different roles depending on the type or fee tier of the school. All non-government schools receive state and federal government funding, a portion of which is based on the number of students enrolled at the school, and the school’s Capacity to Contribute (CTC) score, which measures a school community’s capacity to contribute to the ongoing costs of running the school.

The method used by the government to calculate CTC scores has changed in recent years. Instead of the socio-economic status score of the area where the students reside, Direct Measure of Income (DMI) is now being used. DMI is calculated by the median income of parents at the school, and school funding is then based on DMI comparisons with other schools. This is something for schools to consider as part of their enrolment strategy, as using bursaries to attract or retain families with lower incomes will lower a schools CTC score, and increase government funding.

Lower fee schools generally receive a higher amount of government funding per student compared to higher fee schools. Per student, the funding can be more financially valuable to the school than the school fees paid by their parents. In these cases giving out bursaries to families can not only be a decision based on providing care to that family, but on the financial health of the school as well. Fixed costs such as teachers salaries and utility bills do not go away if a school loses an enrolment, but the school’s access to government funding is impacted, as well as any portion of the fees that might have been collected.

Under the current economic climate, families are not the only ones who need to be thinking about their budget. Particularly while applications for bursaries and fee concessions rise, schools need to think about how they can balance their duty of care, while remaining financially sustainable themselves. Bursaries are a key tool for schools to provide support to deserving families, but to continue to be viable, there needs to be an objective application process in place.

Subjectiveness vs objectiveness in the bursary applications

Objectivity in the bursary applications is a common pain point for principals and school business managers. Schools traditionally have a duty of care, which can make it challenging to remove emotion from the equation. This becomes more difficult when families have multi-generation relationships with the school, or in economic downturns when lots of families are hit with difficult circumstances.

Having and sticking to a consistent process will increase objectivity for your bursary applications. Even the most simple process when applied consistently can go a long way towards removing emotion. As well as this, if a family isn’t genuine in their bursary application, they may see the process and think twice before applying.

At The McDonald College in Sydney, families applying for a bursary fill out a financial assistance form. This collects information about what their circumstances are leading up to the application, assets and liabilities, and income and expenditure. The information is then assessed confidentially by the finance committee and a decision on what type of assistance is made.

Once financial information is collected from a family, it can be compared with benchmarks such as national average living expenses, Household Expenditure Measure or the Henderson Poverty Line to assess a family's need for a bursary.

How much to offer

The question of “How much bursary to offer a family?” is another common challenge. There are a number of factors involved that will be unique to each school and application. Before making any decisions a school should have a clear understanding how much a bursary costs the school compared to the impact of government funding they receive from continuation of the enrolment.

How easily a school can replace an enrolment is another factor to be considered. Some schools have lengthy waitlists where they can quickly replace a student, but if this is not the case extra consideration is required.

Using Edstart Extend as part of your process

One way a school can remove subjectivity from bursaries is to use Edstart Extend as the first step of their process. If a family applies for Edstart Extend, they will be taken through the Edstart application process, where income and expenses are verified with a copy of their bank statement. As Edstart is a regulated business, the process is conducted in a completely objective manner.

If they are successful in their application they can spread the payment of their school fees for up to five years beyond graduation. If unsuccessful in their application, then the school knows they have a genuine need for a bursary and can take it further from there. Depending on the situation, some Edstart partner schools have chosen to absorb the fees and interest from Edstart Extend to help families pay their fees.

As well as adding objectivity, using Edstart Extend reduces the strain on your finance team, freeing up their time to focus on other tasks. By putting this space between your team and the decision you also remove another common pain point - wondering whether they made the right decision to award the bursary.

About Edstart
Edstart is a leading technology and financial services company providing funding and payment services for education. We offer fee management solutions to schools and flexible payment plans to parents to help make school fees easier to manage.

To see how we can help you, visit our main website.

Find out more

Related articles

Edstart Australia Pty Ltd ABN 48 611 024 205 holds Australian credit licence number 485096

Copyright © Edstart Pty Ltd 2024