It’s the age old debate, private versus public and whether a private school education is worth the big bucks. This topic came up over the weekend and it’s wasn’t an easy question to answer. It’s a touchy topic. Everyone has their preferences and biases based on their upbringing. As you will have seen in this week’s newspapers, private school education fees have gone through the roof. In some cases the rise has been double inflation and wages. There has been a 0.7%-4.9% increase for leading private schools compared to the inflation rate of 1.8%. Trinity Grammar in Melbourne had a fee increase of 5% for a year 12 student to $32,280 per year. Haileybury was $28,710. Sydney was the most expensive city in Australia to send a child to private school.
Let’s just think about that for a minute, $30k a year? That’s ridiculous. For that price you could snag yourself a cute Alfa Romeo MiTo or better yet a mean and sexy Harley Davidson Fat Boy. Heck you could even spend the entire summer on the beaches of Marbella, Spain. You get the picture. If you tally all that up over the years of schooling, your kid will set you back over $500,000. If you have more than one kid, this problem becomes even more painful. It isn’t too dissimilar to have another house mortgage. Education costs have risen 61% over the last decade but the real issue is that this figure is double the growth for wages and inflation. People are earning only a little more than they did ten years ago, yet it costs a packet load more for a private school education. Parents that want to send their kids to a private school will find it a lot tougher than the previous generation. I even read somewhere that costs have now taken up over 25% of the family income. That means school fees will eat into the family budget and your standard of living. The real question is whether it’s worth spending that much money on a private school.
The best bit of advice I can give you, is to choose a school that suits the child. At the end of the day, everything depends on your child.
Just because you send your child to a well-known independent private school, doesn’t necessarily mean that it’s better path. There’s no point stretching the family budget to the point where you’re eating baked beans and bread, if your child isn’t suited to the school. It all comes down to the child, their abilities and determination. Research from the Wenglinksky report showed that students that attended independent private schools were no better off academically than those that attended public schools. Private school students performed no better in maths, reading, science and history that their counterparts at public schools. The hard facts presented by the National Institute for Labour Studies at Flinders University found that there was a stronger association between the socio-economic status of a student that determined their test scores. So in other words, a child that attends a school that comes from a higher socio economic status is much likely to achieve higher scores irrespective if the school is public or private. This hard fact, surprised me a little. I was always under the impression that privates did better than publics academically. But as research shows, they both achieve similar academic outcomes, if students are from similar backgrounds or socio economic status. For example the prestigious Caulfield Grammar which costs parents $24,000 a year in fees for a year 12 student achieves the same results as Balwyn High School, which is public.
What is my opinion?
I completed most of my schooling at Haileybury College in Keysborough. It is one of Victoria’s most prestigious private schools and is part of the Associated Public Schools (APS) group. That includes Scotch College, Wesley, Brighton Grammar, Caulfield Grammar, Xavier and St Kevins etc. My parents weren’t wealthy but they wanted to give me the best education, no questions asked. They were just your ordinary hard working middle class, trying to give me the best. Notice how I have used the word ‘most’ in ‘most of my schooling at Haileybury’? Well there’s a story behind it. To put it bluntly, I was a ratbag at high school. I had no interest in sport, I wanted to be cool, wore my socks down, shirt out and was an all-round trouble maker. Always in detention, always in the Marshall’s office. Haileybury had its own disciplinary officer. His nickname was the Marshall. He was an ex-navy man. Tough as guts. Because I visited him so frequently, he took a liking to me and we got along quite well. I was intelligent, sure. But my intelligence was never put to good use because I hung around the wrong crowd. Whilst I never failed anything, I never really excelled. No matter how smart you thought you were, the top kids at Haileybury were on another level of intelligence. It was kind of demotivating. The same went with sports. Haileybury bred super athletes. It was tough competing with them. So I just sailed through high-school, neither happy nor unhappy, just took every day as it came. I was however always respectful towards my teachers and my elders. If Haileybury taught me anything it was to always aim for the sky, maintain a high standard and have respect.
However almost halfway through year 12, I left Haileybury. I decided I was going to turn this ship around and somehow make my parents proud. One of my school friend’s fathers was the principal of a public school called McKinnon Secondary in Melbourne’s inner suburbs. It was predominantly Jewish / Greek. The school accepted students within its zoned area which only a few kilometres wide. I was granted an exception. It was also co-ed. The difference in school fees was huge. At that time Haileybury cost approximately $10k per year whereas McKinnon was a fraction of that. The good news was that my parents could spend that spare cash on private tuition. McKinnon didn’t have the high quality sporting facilities, library, laboratory facilities, music or arts rooms that Haileybury did. And that was ok. Students at McKinnon were friendly, highly motivated and determined. And that’s exactly what I needed. To just fit in. To cut a long story short, I finished the year with an outstanding academic result that far exceeding anyone’s expectations, even my own. And I did that at a public school. I then went on to complete a double degree at Monash University and the rest is history.
Would I send my child to a private or public school? My answer to that is yes and yes. I’d send my child to both. Haileybury had a median VCE study score of 35. McKinnon had a score of 34. Both schools are identical academically. Whilst changing schools can be disruptive it can secure an education that balances the costs and benefits of both. You could send your child to public school until they finish year 10. Then transition them to a private school to complete year 11 and 12. That’s when the child will become serious about their academics. If your child is a high achiever and it’s evident early on, try and secure a scholarship. This will dramatically reduce the cost of private school fees. Paying high school fees for football fields, rowing sheds, music centres, theatres, athletics fields and swimming pools makes no difference at all for a student’s final score. If your child is the next Usain Bolt then a private school’s sporting facilities will be put to good use.
How much is it going to cost me?
You’ll need to estimate how much you’ll need based on the school you want to send your child to, private or public. This will mean that you’ll need to start saving when your child is born. Make a budget and decide how much you can put aside each week. Increase the amount each year and invest your savings. Here are 5 ways you can save for your child’s education:
- Invest in the name of the parent earning the lower income – has tax benefits.
- Use an investment bond – Earnings are taxed at 30%.
- Saving in an offset accounts against home loan – Make extra repayments into a bank account attached to home loan. This reduces the interest payable on your loan.
- Set up a Family Trust – An effective tax structure to distribute income to members at a lower tax rate.
- Education savings plan – Is a specific purpose fund dedicated towards saving for education and which has been granted specific beneficial tax treatment by the government.
With all of this in mind, the argument for private vs public is more about the child and where the child will likely do better. Making this decision means taking a lot of things into account. The common misconception that a private school education is always better, is a myth. The truth is, it has no impact on their academic achievements. It’s all up to the child.