Six Ways to Pay for Private School

Paying for Private School

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Attending a boarding school isn't cheap, we all know that. And today, many tuitions can cost a family as much as $70,000 a year (now multiple that by four years, yikes!). Most private schools seem to be topping out around $45,000 to $55,000 a year, but some go well above that amount. Day school tuition typically runs about half that cost, or even less, depending on where you live. Even the primary grades cost a fortune these days.

Paying for a private school education requires tremendous sacrifice for most parents. So how do you do it? How do you manage to pay for private school tuition over the course of your child's education? Here are six ways you can manage those large tuition bills.

Earn Cash Back on Tuition Payments

Most schools expect payment of fees in two installments: one due in the summer, typically by July 1, and the other due in the late fall, typically by the end of November of the current academic year. Other schools may do their billing by semester or term though, so it varies. But, a little tip that not many families know is that schools will permit payment with a credit card. Simply make your tuition payment twice a year on a credit card with a rewards program, like a cash back card or earn miles, and then make your regularly scheduled monthly payments on the card.

Lump Sum Discounts

Schools always hate chasing down families who are late on their bills, which can have some negative results.

Check out this warning about what can happen if you don't pay your bill. BUT ... if you work with the school and pay your bill upfront, it's often met with a discount. That's right ... if you're able to pay your tuition bill in full by July 1, the school may offer you a 5-10% discount on the overall amount.

Discount plus earning cash back with credit card payments? That sounds like a deal to me. 

Tuition Payment Plans

OK, so not everyone can make lump sum payments and use a credit card to do so. For those families, there are still plenty of options. Most schools participate in tuition payment plans which are offered by outside providers, not the school itself. The way these plans work is that you pay one tenth of the expenses each month to the payment plan provider, which in turn pays the school on an agreed basis. It can be a real boon to your cash flow by allowing the payments to be spread equally over a number of months, and the schools like that they don't have to manage your billing. It's a win-win. 

Financial Aid & Scholarships

Almost every school offers some form of financial aid. You have to file an application for aid with the school and also file a standardized form such as the Parents' Financial Statement issued by the School and Student Services for Financial Aid. The amount of aid which you can reasonably expect depends to a great extent on the size of the school's endowment, how much the school really wants to recruit your child, and how the school allots its scholarships. Several schools now offer a virtually free education if your family income is below $60-75,000.

So, if you need financial aid, see what the various schools on your short list can offer. Finally, be sure to ask around your community. Many civic and religious groups provide scholarships.

Loans

Just like in college, loans are an option to pay for private school, though these are usually in the parents' names, while college loans are often in the students' names. Families have the ability to borrow against their assets to pay for a private school education. There are also some specialized educational loan programs available, and your private school might offer or contract with a loan program, as well. It is always a good idea to consult your tax adviser and financial planner before making a major financial decision such as this.

Company Benefits

Many major corporations will pay for tuition and related educational expenses for dependent children of expatriate employees.

So if you are posted to Belgium tomorrow, the main issue you will face is getting your children into the local international school. Fortunately for you the tuition expenses will be paid for you by your company. Ask your Human Resources department for details.

 

Article edited by Stacy Jagodowski - @stacyjago - Private School Page