For most families, the idea of paying for private school especially sandwiched between the heavy burden of child-care and the hard hit of higher education comes with a large dose of financial stress.
There are tensions between wanting the best for your child and saving for your own retirement; between choosing to live in a costly urban area and finding a school that is academically satisfying; between footing the bill for a private K-12 education and saving for college.
Private schools run the gamut—just like colleges. Some are good, some are just OK, and some are truly outstanding. The best of the best belong to the National Association of Independent Schools and include some of the country’s most storied prep schools. Costs vary by State and quality of school. Tuition alone can cost as little as $2,500 in North Dakota, or as much as $45,000 in New York City. The cost of non-religious private school now tops $13,000 per year, and it has more than doubled in the past 20 years
The average cost of daycare is even higher, and the price for college can be twice that. A mid-range option for child-care, private school, and public college could easily run a family more than $230,000 in 23 years. That’s the price of a second home you weren’t able to buy; the cost of family vacations you didn’t take; the amount you didn’t contribute to retirement. The families for whom $230,000 for education is manageable are increasingly rare.
Still, people choose private school for a variety of reasons, especially if their local public school is subpar. If your children demonstrate a need for private education– perhaps because of a learning delay or behavior issue or because they are gifted, you may opt to pay up now and change your expectations about college, she said.
Cheaper higher-Ed options include some of the smaller public schools and lesser-known private colleges. Non-name-brand schools may offer more scholarship money and financial aid than higher profile schools that don't need to compete for students.
In addition to recalibrating college expectations, selecting private school may mean a shift in a family’s lifestyle. “For people who would like to send their children to private school but are on the borderline – maybe one parent works part-time, maybe they don’t have the highest earning jobs – it becomes a question of thinking about all the things you’d like to do, then prioritizing,” says. Thomas Fisher, a financial planner and investment advisor at Fisher Financial Strategies in Cambridge, Mass.
Fisher recommends that families who want private school visit a financial planner soon after their birth of their child to make a plan. We can say this is what your spending looks like for the first eight years of the child’s life and then have a better idea what is possible at future stages,” he said.
In some areas, like Cambridge, parents could be looking at $30,000 a year in child-care. When the child is school age the cash flow might open up if the family opts for public school, Fisher said. Then they can get down to the business of saving for college. “But if you are going to put what you were paying for child care toward private school, you need a lot of capacity to do that and save for college at the same time,” he said.
Parents need to protect themselves, too. “I warn people against neglecting saving for their own retirement because they want to do all these things for their kids,” Fisher said. “You have to remind people how all the pieces fit together.”
Here are five ways to cover the cost of private school:
Families might consider moving to an area with a strong public school so that they do not have to pay for a K-12 education and can instead save for college. Alternatively, families that are committed to a private education may move to a less expensive home (or an area with lower property taxes) to free up more money for the education.
2. Shop Around
There are more than 30,000 private schools in America (comprising 24 percent of all U.S. schools), according to the Council for American Private Education, and their costs varies widely. Religious schools tend to cost less than secular private schools.
3. Earn More
Those who find that the end goal is so valuable that they would change their work situation to better afford it might consider ways to increase the family’s earnings. For example, a spouse who isn’t working or is working part-time could shift to full-time employment.
4. Get Help from Family
Occasionally a student’s grandparents are willing to help in some way. Even if they don’t pay for private school, the grandparents might agree to help with college, alleviating that stress for the parents. Sometimes grandparents who want to reduce the size of their estate will opt to give specific gifts devoted to the cost of education.
5. Apply for Financial Aid
Many private K-12 schools offer financial aid. If you are in a financial category that makes sending your child to private school a stretch, Fisher recommends applying for aid. If aid is offered but is not enough, he suggest with administrators to see if there is a way to bridge the gap between the cost, the aid offered and your ability to pay. Nearly a quarter of private school students get some form of financial aid, according to the National Association of Independent Schools.
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