How to pay for private school

Many parents switched to private school during the pandemic. Here’s what you need to consider about the costs.

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Hanna Horvath, CFP®

Hanna Horvath, CFP®

Managing Editor & Certified Financial Planner™

Hanna Horvath, CFP®, is a certified financial planner and former managing editor at Policygenius. Her work has also been featured in NBC News, Business Insider, Inc. Magazine, CNBC, Best Company, and HerMoney.

Published July 28, 2021 | 4 min read

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If you’re a parent, figuring out how to afford college is on your mind long before your child reaches 18. But many families are starting to think about paying for private secondary school tuition as well. 

The pandemic stoked fears of learning loss from virtual schooling, and some parents didn’t have child care options while they worked from home. Our recent Parents & Money survey found that 23% of parents scaled back or quit work to help with their child’s care or education. 

This led many to seek out schools that were fully in-person, which tended to be independent, private institutions. A survey conducted by the journal Education Next found that 60% of private school students received in‐​person instruction during the pandemic, compared to only 24% of traditional public school students.

“With four girls of my own, it was definitely a consideration to just get them back into the classroom,” said Catherine Valega, certified financial planner at Green Bee Advisory. “Many families move to towns with good school systems with the hopes they won’t have to pay for private school. But plans may change.” 

Though schooling for both public and private schools is more or less back to in-person, you may still be wondering if your child should make the switch to private. Here’s what you need to consider. 

Private school versus public school costs

A key difference between public and private school is cost. Local property taxes primarily fund public schools — and better schools usually mean higher property taxes. Which public school your child attends depends on which school district you live in. Almost 90% of students attend public school

In contrast, private schools charge tuition. The average annual private school tuition is around $12,350, though some prestigious private schools can run over $45,000 a year. Tuition costs range depending on where you live, and the type of school. Factor in additional expenses like tech, books, field trips and uniforms, and the total cost of private school averages around $16,050 according to  

“Sending your children to private school can be a sacrifice for any parents. The tuition can be the equivalent of a car payment or even a mortgage payment depending on the school,” said Thomas Rindahl, certified financial planner at TruWest Wealth Management Services. “With this in mind, parents have to determine if the advantages of the private school are sufficiently better than the public option in order to make it worth it.”

Should you consider private school? 

Whether you should send your child to private school is a very personal decision, depending on your child’s needs and your family’s situation. Consider factors such as the school’s academic reputation, class size, safety, special programs or athletics, location, philosophy and, of course, price, said Rindahl. 

A quick Google search can identify the top public and private schools in your area, based on standardized test scores and college acceptance rates. Studies measuring the long-term outcomes of public versus private school students are mixed, but private school parents report feeling more confident about their children’s education post-COVID: A February 2021 EdChoice survey found that 48% of private school parents felt their children were progressing very well academically, compared to 25% of public school parents. 

Most public schools offer a general academic curriculum, designed for most students, which will include common courses like math, English, history, and science. Private schools, on the other hand, may have the flexibility (and resources) to create specialized programs in specific subjects like music or performing arts. 

Private schools also often have smaller class sizes for a more hands-on approach to learning: The median class size for K-12 private schools was around 15 students, according to the National Association of Independent Schools, compared to 19 students in public schools. But public schools are, on average, more diverse than private schools, which can be hugely beneficial to your child in the long run

“I think of private school as an investment for my children,” said Kashif Ahmed, certified financial planner at American Private Wealth. “I think the long-term benefits, at least for my children, outweighed the initial costs.” 

If you have a child with a disability, they may benefit from attending a private school that can better cater to their needs. We have a complete financial guide to raising a child with disabilities here

The bottom line: There’s no right or wrong answer on whether to send your child to public or private school. It’s up to you and what’s important to your child and your family, though cost is an important factor when deciding whether to enroll.

How to pay for private school 

Valega outlined some basic tips on how to pay for private school. 

Get financial aid

Most private schools provide some form of financial aid. Packages often vary, depending on the school’s endowment fund and tuition costs. Across private schools, a median 26.7% of students received financial aid during the 2020-2021 school year, according to the NAIS. The median grant amount per student was $19,240 for the 2020-2021 school year, up from $18,717 the prior year. 

Even if you don’t think you’ll qualify, it doesn’t hurt to apply: There’s often no income limit that automatically makes you ineligible. Schools have their own deadlines for financial aid, so make sure to submit an application on time. Common types of financial aid include:

  1. Grants, the most common type of financial aid, are awarded directly to the student. Students must reapply each year. 

  2. Merit scholarships are given to students who excel academically, and are often based on financial need. 

  3. Some outside organizations offer their own scholarships. Each program has its own eligibility rules, application, and deadline.

  4. Certain schools offer tuition payment plans, allowing parents to make incremental payments instead of two lump sum payments each semester. 

  5. If you have multiple children, enrolling them in the same private school may earn you a sibling discount

Other ways to pay 

  1. Negotiate: Like college tuition, secondary school tuition is not set in stone. Most of the time, you should be able to negotiate costs. Talk to your school’s administrator to better understand your options. 

  2. Compare schools in your area. If you live in an urban area, there are often many different private schools to choose from, with different tuition costs. Some schools may offer more financial aid than others. 

  3. Unlike college, there aren’t federally subsidized loans for K-12 education. But there are private loans available from private lenders. Parents must apply directly to the lender, and the loan amount and interest rates depend on the lender’s requirements — most experts won’t recommend this option due to the high interest rates, explained Valega. 

  4. The Tax Cuts and Jobs Act made it possible to withdraw up to $10,000 annually from a 529 plan to pay for private secondary school without having to pay a penalty. Parents can also withdraw up to $2,000 from a Coverdell Education Savings Account to pay for secondary school expenses tax-free, though there are income limits. Lastly, you can withdraw 100% of your Roth IRA contributions (but not earnings) tax-free to use for your child’s school — though you’d be dipping into your retirement savings, which most experts don’t recommend. 

Getting your family finances in order? Here’s a comprehensive financial guide to raising kids.

Image: Nastia Kobzarenko