How to Confidently Afford a Private School Education for Your Children

Few decisions have more impact on your child’s future than your choice of school. Many factors go into deciding where best to send your little for their education, one of which is cost.

Have you thought your budget would preclude a private education? It may not be as unmanageable as you think, and there are ways to make it more affordable.

In this article, we’ll talk about the benefits of a quality education and why people often choose a private school. Then we’ll look at ways to make a private education more financially possible for your family.

The benefits of a quality education

Education benefits the individual and plays a vital role in social stability and progress. It contributes to good health, provides a greater range of options and pathways for your future, and helps achieve economic security.

By listing education number four in their list of 17 Sustainable Development Goals the United Nations clearly recognised the fundamental and inherent value of a quality education experience as helping to “Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”

A quality education can help students:

• become well-rounded individuals with strong personal character
• become proficient in essential literacy and numeracy skills
• develop skills in critical thinking and problem solving
• learn to thrive and be responsible in a digital world

Furthermore, students with a higher quality of education are more likely to find jobs. According to 2019 figures from the Australian Bureau of Statistics, 77 percent of people aged 15-74 with a post-school qualification (certificate, diploma or degree) were employed, compared with 56 percent of people the same age without post-school qualifications. Most higher-paying careers require a higher educational level.

Educational attainment is also linked with better lifelong physical and mental health. The Australian Institute of Health and Welfare points out that “Education equips people to achieve stable employment, have a secure income, live in adequate housing, provide for families and cope with ill health by assisting them to make informed health care choices.”

Why choose a private education for your children?

Parents choose private schooling for many reasons, including:

Academic standards

Some private schools are more academically rigorous. They may require students to meet and maintain specific academic criteria for continuing enrolment.

Co-curricular activities

Some private schools offer co-curricular programs that suit a student’s interests and aptitudes. Examples include performing arts (such as dance, music and drama), visual arts, agricultural, sports programs, outdoor education programs, as well as Mission and Service opportunities.

Student-teacher ratio

Private schools may be more meticulous about ensuring class sizes are optimal for supporting student learning.

Safety and discipline

Private schools often emphasise discipline and have minimal tolerance for behaviours like bullying and vaping. Because ACC puts student welfare as our highest priority, we take a hard stance against bullying and vaping. This ensures a safe and disciplined environment for all students.

Values

Many private schools represent a particular, indefatigable system of values or educational philosophy. Examples include Catholic, Christian, and Steiner schools. Christian families often prefer a school that encourages the same values that are taught at home.

Pastoral care

For some families, it’s important their children are nurtured and have access to emotional and spiritual support such as pastoral care. Private Schools often have a special focus on Pastoral Care and Student Welfare.

How to afford a private education for your child

Before looking at funding options, it’s important to note that private schools don’t just cater for high-income families. As Independent Schools Australia points out, expensive private schools don’t represent the majority of independent schools. “In fact, ninety per cent of Independent schools are low to medium fee establishments which reflect the diversity of Australian society,” they note.

Their data shows independent school fees vary greatly, and most are much more affordable than people expect. In 2018, for example, the median fee for Australian metropolitan independent schools was $6,772 per year. The same year, two thirds of metropolitan independent schools Australia-wide were charging less than $10,000 per year.

Moreover, they explain that parents can save on private school costs in various ways, as many schools offer scholarships, all-inclusive fees, and discounts for siblings or for lump sum payments.

They add that independent schools “also cater to specific groups of disadvantaged students including: high needs students with disability attending special schools, Indigenous students attending remote 100 per cent indigenous schools, and highly disadvantaged urban youth who have been excluded from mainstream schools.”

Let’s look at how you can confidently afford a private education for your children.

1. Budgeting and good stewardship

Scripture clearly says Christians are responsible for training their children in the way they should go (Prov 6:22). In Deuteronomy 11: 19-20, for example, the Israelites are commanded to teach God’s laws to their children, “talking about them when you sit at home and when you walk along the road, when you lie down and when you get up. Write them on the doorframes of your houses and on your gates.”

The Bible also says much about managing money. In Luke 14:28–30, Jesus talks about the importance of having a plan before starting something:

“For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’”

While Jesus was referring to the cost of following him, it’s reasonable to apply this when pondering what you’re willing to sacrifice to ensure your child gets the education you believe is best for them.

When considering ways to fund a private education, start by looking at your own financial situation. It’s important not to scrimp to the point where it strains your marriage, but many families are willing to forego some things for their children's education.

If you’re on a modest income, consider going without less important things, such as overseas holidays, new cars, the latest electronic gadgets or dining out. Sit down and take a good look at your budget. Ask yourself questions like:

• Where could we cut back (going without your daily take-away coffee could save you about $1,460 per year, for example)
• Could we rent somewhere cheaper, get a better home loan rate and/or consolidate our loans?
• Can we save money around the home e.g. on subscriptions to entertainment services or power, water and phone bills?
• Could we save on other necessary items e.g. by buying second-hand uniforms?

I know of a family who did distance education and lived on one income. They cut each other’s hair, shared a car and mobile phone, and bought clothes from op shops. They rarely got take-away and ate out only on special occasions. But they report that none of them felt like they were missing out. Rather, they are sure that it was worth it to give their children the education they felt God led them to provide.

If you’re considering a private education for your children, it may be worth talking to a financial adviser. They can provide up-to-date advice about things like budgeting, investing and debt management. Be sure to look at the school’s policies too, as many offer discounts for siblings or lump sum/early fee payment.

You might also be able to find additional sources of income. One family we know built their home with two extra rooms underneath so they could host paying international students. Others make, bake or grow things and sell them.

If you haven’t already, it’s worth seeing whether you’re eligible for government payments and services that can help with your child's education and health care.

2. Scholarships

Many schools offer scholarships, primarily based on academic merit and/or financial need. As the Good Schools Guide points out, scholarship applicants may have to meet various criteria, such as:

• satisfactory results on an examination
• attending an interview
• providing a portfolio of work
• demonstrating proficiency in a musical instrument
• living in an isolated area
• practising a religious faith.

They note that academic scholarships are by far the largest scholarship category and usually awarded based on test results. Many private schools use tests developed by the Australian Council for Educational Research (ACER). The ACER tests involve extensively trialled items designed to identify outstanding performance. They are available for both primary and high-school aged children. Read more about ACER Scholarships here.

Students planning to undertake academic testing may benefit from taking practice or mock exams before the real thing and/or receiving tutoring from someone familiar with the tests.

Some schools will offer internal scholarships that don’t require testing. For example, schools providing Prep to Year 12, or those within a system where primary schools feed into a single high school, may offer scholarships based on school results and teacher recommendations.

Aside from academic merit, some schools grant scholarships based on high achievement in other fields, including sport, music, art, maths, science and drama. There are also numerous scholarships for students of Aboriginal and Torres Strait Islander descent.

Some private schools will offer fee relief to families experiencing financial or personal hardship, such as a parent with a disability. Furthermore, Christian schools may grant fee relief to low-income families involved in Christian ministry, such as pastors and missionaries.

Check with the school you’re interested in to see what they can offer.

3. Bonds and investments

Tax laws and interest rates change regularly, so it’s vital to speak to a financial expert before making any investment decisions. But according to this 2019 article in Money magazine, there are four ways you can invest to pay for education:

Investment bonds

This is a form of managed investment usually offered by large fund managers. The article explains that income earned on the bond's investments gets taxed at 30 per cent (the company rate) and paid by the investment company over the life of the bond, provided it’s held at least 10 years. After this, ‘tax paid’ earnings are returned to the investor – a plus for parents whose marginal tax rate is over 30 per cent.

They note that a marginal tax rate of 32.5 per cent (plus Medicare) starts at an annual income of $37,001, so you don't need to be on a high income to benefit from insurance bonds.

It’s also possible to make additional contributions to insurance bonds, although there are caps to how much.

Education bonds

Also known as education savings funds, these are offered by firms such as ASG and Australian Unity.

According to the article, these work similarly to investment bonds. The fund is taxed 30 percent on its investment earnings, but when money is drawn down to pay for school costs, the fund can claim this tax back and pass the savings on to parents.

They note that these bonds are not usually as flexible as investment bonds.

Learn more about bonds at moneysmart.gov.au.

Managed investments

This involves paying a professional to make investment decisions for you. There are several types. Read more about managed investments at moneysmart.gov.au.

Using your home loan

The Money article points out that paying school fees often coincides with paying down a home loan. It can therefore make sense to help pay for education by using an offset account or making extra loan repayments that you can redraw to pay school costs.

As noted above, financial decisions are complex, so be sure to enlist advice from a trusted, qualified professional.

Private education price guide

Independent school fees vary greatly but may be more affordable than you expect.

Here’s a guide to costs associated with five different schooling options in Australia:

1. Public schools: public education is said to be free, but parents can be paying up to $1,300 per child per year in ‘term fees’, according to this ABC News article.
2. Catholic schools: each school sets its fee level, so you’ll need to check with the school you’re interested in. As an example, tuition fees in the Diocese of Parramatta range from $1,272 per year for kindergarten to $3,228 for years 11 and 12.
3. Independent (or private) schools: fees vary hugely depending on the year level, school size and sociodemographic factors. They can be under $5,000 to $30,000 plus per year. Check the school’s website for their fee schedule.
4. Home school: costs vary from hundreds to thousands of dollars, depending on the method and resources you use. By way of example, fees for Australian Christian Home Schooling range from $578 per year for one child, to a total of $2,098 for five children.
5. Online school (distance education): this can be a very affordable way of providing a quality private education. Depending on the school, you could pay under $2,000 to approximately $6,000 per year. At ACC Marsden Park, for example, 2023 fees for the first student in years 9-10 is $$2,775 per year.

When budgeting, be mindful that all school types may have other costs, such as enrolment fees, building fund contributions, and fees for excursions, technology, resources and co-curricular activities.

While private education may seem expensive, this article has shown that it can be attainable, even for families on modest incomes. Strategies include budgeting, exploring scholarships, and making informed investments. More than the immediate monetary sacrifice, choosing private education signifies your commitment to give your child a robust academic experience, potentially better student-teacher ratios, co-curricular opportunities, and a value-based environment that matches your family's beliefs. Indeed, it's a decision that may shape your child’s future – their character, skills, career, and overall life satisfaction. So take your time, count the costs, and make the necessary sacrifices.