Can You Afford Private School?
“Can we afford private school?” is a question we’ve been getting from clients for years.
Many of our clients are parents of young children. They are considering private K-12 school and want to know whether it is a good decision for their family.
Here we are in 2021 and the COVID crisis has really changed the conversation. The interest in private school has increased exponentially, and in fact, the articles on the topic we posted years ago are suddenly some of the most popular content on our website.
Why the change? I think it comes down to the kids, the parents, and the schools.
The kids – Many kids have struggled academically (often for the first time) this year due to the difficulty to learn and focus in remote and hybrid school arrangements.
The parents – Parents have suddenly been called upon to manage online school and/or homeschool for their kids, in addition to their “day job”. (I for one am not good this!)
The schools – While arrangements have varied widely by local district, many parents have been frustrated to see private school students back in class for this entire school year, while their own public school kids were on a remote or hybrid schedule.
In short, the past school year was tough on the kids, the teachers, and yes, the parents. All in all, it seems like a good time to update our post about affording private school with some new thoughts – and updated (higher) tuitions!
What it Costs
The first version of this post coincided with my own search for a Kindergarten for my oldest child and included the tuitions for the 2013-2014 school years from the websites of selective private schools in Brooklyn and Manhattan. The average annual tuitions were in the $33-34,000 range per year.
The second version of this article was around the time I started thinking about schools for my younger children (twins) and included the 2018-2019 tuition numbers for the same schools. The average tuitions had increased to the $46-47,000 range in just six years!
It was easy enough to pull the same numbers again for the 2020-2021 school year, and it was no surprise to see another increase to the $50-52,000 range. Here are the numbers:
My point in this exercise is to underline the importance of thinking about the total cost of this commitment and setting the expectation that the price will likely increase every year.
Because if you are a parent considering a top private school, $40 or 50K per year might not have sounded that bad at first. After all, you may be paying close to that for a full-time nanny when your child is very young.
But once you add up the cost through grade 12? That total is sobering – that’s a number that could buy a house, fund retirement, etc. Private school may or may not be the best use of it for your family.
However, that isn’t the full cost anyway.
What it Really Costs
Parents need to take the less obvious costs into account: the impact of taxes, inflation and multiple kids, additional expenses of private school, and the opportunity cost.
Taxes
The tuition price is after-tax dollars. If you are in the highest income tax bracket and live in this city, your combined marginal income taxes (federal, state and city) are close to 50%.
To pay $50,000, you would likely need to earmark nearly $100,000 of your gross salary for tuition. And that’s for 1 child. If you have 2 or 3 kids like I do … you have 2-3 times the expense. Do you really want to do that? Can you do that?
Inflation
Do you think prices posted this year will stay the same for the next 12? In just the last 8 years, since we originally wrote this post, the average tuition has increased by 51%. That is a staggering number!
Additional Expenses
Private schools are constantly raising money. Activities and such cost extra too. If you both parents work outside the home, you’ll also need to pay for afternoon childcare, camps, and activities. And it’s pretty safe to predict that when your kid’s friends have expensive toys, yours will want them too.
Opportunity Cost
Let’s assume you can pay the tuition. OK, but will you need to sacrifice in other ways? Many would argue that they will gladly sacrifice or “nothing is too good” for their kids. But is that good for you?
Will this expense prevent you from saving for the future, buying the home you want to live in, or generally enjoying your hard-earned money? If you are not saving for retirement, will your kids or grandkids need to take care of you? If so, can you really afford it?
You don’t want to realize you are in over your head in a few years. It’s much harder to consider taking your 2nd or 3rd grader out of private school, than sending them to public school in the first place. It’s not a place I want you to be.
Consider Alternatives
Public School
Public school can be a wonderful thing, but sometimes a school is what you make of it. The combination of public school with outside enrichment activities may be ideal for many families. Depending on your area, specialized schools or programs may be out there – unfortunately, some research may be involved.
Shorter Time Frame
Fewer years in an expensive private school will reduce the total cost. We know families who choose a private elementary and middle school, with a plan to seek a spot at a selective public high school. Or the opposite – their kids attend a beloved local elementary school with a plan to matriculate into a private middle or high school. Either may work for your family. (Those middle school years can be rough!)
Lower Cost Options
The schools I listed are some of the most expensive in the country. There are far less expensive options, even in Brooklyn and Manhattan. I personally attended a parochial high school, and as a parent it looks like a “good deal” to me now! There are also community and co-op schools with far lower tuitions which may be a good fit for your child.
Financial aid may be available in some cases as well, but expect a discount, not a free ride.
Homeschooling
I can’t believe I am even including this, because I know that it would be a terrible choice for my family (and especially me, LOL!). But I will say that as they years go by, I have come to know people who have either been homeschooled or have chosen to homeschool their kids, and it has been the right choice for their family.
In Closing
I completely understand the attraction to private schools, especially after a frustrating school year like the last one.
If you are considering private school, please consider the effect on your entire financial picture. If you can afford it, great! But if you are not sure, think long and hard before making a financial commitment.
Good luck!
