Tanya Steinhofer No Comments

Private schools are a wonderful part of our education system. Families choose to send their children to private schools for many reasons: lack of good public schools in their area, adherence to a particular educational or religious philosophy, better support for special needs children or a desire to replicate their educational background, as well as a belief that a particular private school might provide their child a superior educational experience.

The decision to send a child to private elementary and high school is a big decision on many fronts, but particularly on the financial front. While some families can easily afford this incremental cost without jeopardizing other goals, many families cannot and embark on the journey without fully considering all the costs associated with private school, nor its impact on their ability to achieve other important goals, such as retirement, paying for college or buying a house. As a financial planner helping families with young children, I decided to research this topic with a focus on the financial aspects and share my findings so families can fully consider the impacts of this decision.

Early on in my research, I was fortunate to discover two private school consultants, Betsy Little and Paula Molligan and their informative book, Private K-8 Schools of San Francisco and Marin.1 Much of the following data comes from their book, though I updated quantitative data points from school websites and from information provided by admissions counselors.

Before I get into the costs of private schools, it is helpful to first provide some context. Private schools cover a broad range of school types, but primarily fall into three categories: non-profit independent schools, privately-owned proprietary schools and religiously-affiliated schools. In California, approximately 9% of all children attend private schools. In Marin County, the figure is 19% and in San Francisco, it is 30%.

In terms of the application process, parents can generally request information and applications beginning in August. School tours usually start in October and applications are due between November and January. Admission decisions are typically sent out in mid-March. Costs associated with the application process include a non-refundable application fee of up to $150 per child per school and once admitted, a $300-$2,500 non-refundable deposit to secure the child’s spot.

Tuition

The largest cost by far is the cost of tuition. Tuition cost for elementary schools ranges from approximately $3,000 – $28,000 per year, with religious schools being on the lower end and the other private schools on the higher end.  Tuition cost is often higher at the high school level, so it’s important to ask how the cost changes by grade level. Interestingly, what is covered by tuition varies greatly, so it is important to ask the schools you are considering what is included in the cost of tuition and what is not. Typical items that might be included are books, materials, outdoor education, field trips and lunches. Some schools (usually the religious ones) also offer a sibling discount, typically ranging from 10% to 25%. Payment options may vary, ranging from monthly to various installment plans.

Charitable Contribution

While not mandatory, there is an expectation that families will also make a donation to support the school’s programs. If it is a non-profit school, this donation is tax-deductible to the extent provided by law. Most schools would like 100% parent participation in the annual fund appeal, as it makes it easier for the schools to win grants and other sources of funding. Schools expect families to give at a level that does not pose a hardship. It is worth asking what the typical or expected donation is, so you can factor this information into your total cost calculation. Other “opportunities” to donate include fundraising auctions and capital campaigns. Although not an explicit cost, the schools vary in how much parental involvement they expect, so it’s worth asking what their expectations are in that area.

Other Costs

There are myriad other costs to consider calculating the total cost to send your child to private school. These costs include the cost of uniforms, extended daycare, after-school enrichment programs, special trips, extra materials and miscellaneous other fees.

 Tuition Inflation

Not only must you consider the current cost of private school, but the future cost as well, as the cost will continue for many years into the future. Education costs nationally have been increasing at a rate faster than the general rate of inflation for many years, and private school is no exception. Private school tuition increases have averaged around 4-6% annually, as compared to 2-3% general inflation.

 Financial Aid

Fortunately, most schools offer some financial aid, with some schools offering significant aid. Most aid awarded is need-based and can be in the form of indexed or flexible tuition or outright grants. Most schools participate in the School Scholarship Service, which calculates a family’s ability to pay based on information collected in the Personal Financial Statement. Aid forms are expected to be submitted along with admission applications. Aid levels vary greatly by school, so parents should ask what percentage of students receive some form of financial aid and what the average grant size is. The percentage of students receiving aid is as high as 88% at some schools and a few schools have 90% of their students receiving grants for 50%+ of the tuition. Therefore, it is important not just to factor the gross cost of attendance into your calculations, but the net cost to attend after aid received. Financial aid does not need to be repaid.

In addition to school-provided financial aid, there are several private sources of financial aid for private schools. These sources include The BASIC Fund, the Guardsmen Scholarship Program and the SMART Program. All these sources require parents to demonstrate financial need.

 The Complete Cost of Private School

Ms. Little and Ms. Molligan advise clients that the range for parochial elementary schools is $6-$10K per year, and $16-$29K for private independent elementary schools. The table below summarizes many of the costs for some of the largest private elementary schools in San Francisco and Marin.

In summary, there are many considerations in deciding to send a child to private school. Parents should carefully evaluate the complete costs associated with the schools they are considering and the impact these costs might have on their ability to achieve other important life goals.