Paying for Private School

  • Know the costs of a private school education.
  • Make certain you’re in a position to save for college, too.
  • Look into scholarships, financial aid options, and tax-advantaged savings plans.

Can you afford it?

You may consider a private education an ideal way to prepare academically and increase your child’s chances of getting into a competitive college down the road. But it’s a hollow victory if what you spend on private schooling prevents you from saving adequately for college or retirement.

Make sure you’re in a position to cover your child’s whole education.

Make sure you’re in a position to cover your child’s whole education. If you can’t, it’s probably more important to save for college. That seems logical enough, but not everyone thinks about college savings when the children are still young. It’s easy sometimes to let present concerns take precedence over the future.

If necessary, consider a compromise based on your financial circumstances. One option might be to start a child out in a private elementary school to build an academic base but attend a public high school offering honors and advanced placement programs.

Many public schools, especially at the secondary level, offer opportunities and programs for children who excel academically.

The cost

An infographic that says $21,000 is the median annual tuition across all grades at day schools and that $53,600 is the median annual tuition for boarding schools

Private school tuition isn’t cheap. The median annual tuition across all grades at day schools is $21,000, according to the National Association of Independent Schools (NAIS). For boarding schools it jumps to $53,600.1

Tuition rates vary widely by state, however, and elementary schools are usually cheaper than secondary schools. Take, for instance, the average annual private school tuition in Wisconsin: $3,160 for elementary school and $7,955 for high school. Compare that to the average in Vermont: $9,545 and $33,098.2

Schools affiliated with religious institutions generally charge less than nonreligious private schools.

Financial aid and scholarships

To ease the funding burden, private schools often offer financial assistance and merit-based grants of their own. Some national foundations and organizations offer private school scholarships as well, and some states offer voucher programs and tax benefits.

On average, 22% of private day-school students receive $13,223 in need-based grants.1 Although you won’t have access to the federal funding available to parents of college students, opportunities to potentially save thousands on private school tuition are still out there.

Other ways to save

If you’re looking to put aside money for education, consider a Coverdell Education Savings Account if you’re eligible. Funds have the potential to grow tax-deferred and may be used for primary and elementary expenses in addition to post-secondary ones. You may also want to consider contributing to a 529 plan. Qualified distributions from these plans include up to $10,000 annually for elementary and secondary tuition. Please consider the investment objectives, risks, charges, and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest.

infographic - An infographic that says Private day-school grants: on average 22 percent receive $13,223 in need-based grants

If grandparents or other family members in one of the higher tax brackets offer financial support by putting money into a custodial account, there may be tax savings; however, they should be aware of the “kiddie tax” rules and annual gifting limits.

How much is it really worth?

For some families, private schooling is within reach, but only at a cost. Ask yourself, are you willing to sacrifice material comforts and make lifestyle adjustments for it? Perhaps live in a smaller home? Take fewer, less exotic family vacations?

The answer may be a resounding yes.

If the private school path is the right one for your family, it can pay to do your research, know your options, and plan accordingly.

Next steps

  • If you haven’t done so already, look into the costs of attending each of the private schools you’re considering.
  • Evaluate how school costs fit into your family’s overall financial strategy.
  • Let a Financial Advisor help your family find an appropriate course for funding your child’s private school education.

1 Stats of interest: financial aid:; 2016-2017 figures.
2Average Private School Tuition Cost (2017-2018):