How Parents Pay for Private School

Ever wonder how some parents manage to pay for four years of private high school and then send their kids to college?

Sometimes, so do they.

"There's just (so) much that I don't do because I made this choice," says Ann Botticelli, who budgets around the $1,400 monthly payments for her son's high school tuition.

But it's worth it, she says. And her son, who is making the most of the opportunity, is "a very engaged and appreciative student," she says.

The 'secret'

It turns out the secret to stretching the family paycheck to cover high school tuition isn't really a secret. While some parents opt for payment plans that allow them to spread those tuition bills over eight to 12 months, others are also hanging on to cars longer, taking more modest vacations, working extra hours or jobs, and trimming some "extras" from the family budget.

One California public school teacher recently saw her second and last child graduate from private high school. She drives a 13-year-old car and takes on extra teaching duties and tutoring jobs to meet the bills. "It's a real stretch," says the woman, who prefers not to be named. "And I would do it again."

But it's by no means easy. The average-median tuition (which is an average of the median tuition costs of each grade) for a year at independent schools that are not affiliated with a religion is $17,145 for day students and $33,533 for boarding school students, according to 2005-2006 data from the National Association of Independent Schools.

And costs have skyrocketed, with increases ranging from 65 percent to 92 percent over the 10-year period ending in 2003, depending on the source of the statistics.

Parents who need help to make the payments are tapping a variety of resources. The most common source: financial aid from the school itself.

From 1993 to 2003, tuition increased between 65 percent and 71 percent, according to figures from the NAIS. But the National Center for Education Statistics, which tracks a larger variety and number of schools, shows an increase of 92 percent.

The cost of a year at a private high school increased by 2 percent to 6 percent between 2005 and 2006, says Mark J. Mitchell, vice president of school information services for the National Association of Independent Schools. The percentage increase in prices is "similar to the rise in college tuition," Mitchell says, which has been rising faster than inflation. "If this tuition trend continues, fewer and fewer families will be able to afford it."

Few are borrowing

While they may be pinching pennies, few parents are borrowing to cover tuition.

Families are reluctant to use unsecured loans to pay for private school, according to the NAIS survey. "Relatively few people take out these types of loans," says Mitchell.

"To me, you have to be able to cover it in cash," says Botticelli, who is also saving for her two children's college tuition while she pays for private school.

In the current 2006-2007 school year, of the parents who applied for financial aid, about 16 percent borrowed money through means other than a home loan, according to the NAIS. The majority of those -- 70 percent -- borrowed through a bank or credit union. Twenty-three percent borrowed from family members, 9 percent obtained a loan through the school and 6 percent borrowed from friends.


When parents borrow to pay for high school, about one-third use educational loans, says Daryl Leake, a senior vice president with Key Educational Resources, a division of Key Bank. Borrowers can take up to 20 years to pay it off, but the rate is about 9.56 percent annually on a $10,000 note, he says.

Making it work

The type of school also makes a difference in price. Independent schools that don't have a religious affiliation or financial backing are often more expensive. For example, the average cost of senior year tuition at a Catholic high school is about $5,870, according to 2004-2005 figures from the National Catholic Education Association.

About one-third of parents ask for financial aid and about 27 percent receive it, according to the NCEA. In addition, 62 percent of Catholic schools have students who are also on public assistance.

At Jewish high schools, 35 percent to 41 percent of students receive some type of financial aid, according to 2003-2004 figures from the Partnership for Excellence in Jewish Education.

"Actually, private schools are a lot more affordable than folks think," says Joe McTighe, executive director of the Council for American Private Education, an umbrella association of national private education groups.

Schools do offer payment plans that allow parents to spread payments over the year or make several payments rather than one lump sum.

Of parents who request financial aid, only 17 percent pay the remainder of the bill in one lump sum. Forty-four percent break the bill into monthly payments, 24 percent pay it in two installments and 8 percent pay it quarterly.

Bishop O'Dowd High School in Oakland, Calif., draws from an affluent community, but still about 70 percent of parents have opted for monthly payments, says Stephen Phelps, president.

Tuition payment plans have increased nationwide.

"We've seen a steady increase in families signing up for tuition payment plans," says Nina Vellayan, president of business office solutions for educational lender Sallie Mae.

Schools offer financial aid

At Massachusetts-based Deerfield Academy, 40 percent of families receive some kind of reduced tuition, says Lee Wicks, the secretary of the academy. The average grant is around $13,000, she says.

Factor in that the cost of educating one student for a year is higher than the tuition and, "in a sense, everybody is subsidized," says Wicks.

At Bishop Lynch High School in Dallas, about 30 percent of the students are receiving financial aid, says Ed Leyden, the school's president. Tuition runs about $8,700 and the average aid package is about 25 percent, he says.

Even so, parents are doing "heroic things," such as working extra jobs, to keep their kids in private high schools, he says.

The rule for financial aid: If you need it, ask.

If families think they might want financial aid, it pays to plan ahead. "With most schools, the financial aid deadline is around February," says Mitchell, though some fall earlier and others as late as April 15. And a small number of schools give away their aid dollars on a first-come, first-served basis, he says. So when it comes to applications, "I always tell people, 'the earlier, the better.'"

If you're turned down, or don't get as much aid as you need, you can appeal.

"All schools are willing to hear from a family that feels their need is not being met," Mitchell says. You need to include financial facts the school might not know -- for instance, if the family's financial picture has changed recently, or if there were mitigating circumstances or other financial obligations left out of the application.

Fundraising a serious activity

"One of the things I'm seeing: Schools are getting more aggressive with fundraising," says Mitchell, specifically, the kind of fundraising that will benefit financial aid programs.

McTighe agrees. "Most Catholic high schools have a development director like a college," he says. In addition, some schools are also adding full-time alumni directors and full-time annual fund directors as well.

"Schools have gotten much more serious in their fundraising," McTighe says. "They can really make the case for the need."

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