We continue to update our data base on the cost of educating your children or grandchildren at any one of Sydney’s top Private Schools. We have been doing this exercise across a number of the Eastern Suburbs and North Shore private schools for the past 14 years.
The annual increase year on year remains approximately 6%, before taking into account grade increases. Essentially, if your child had started pre-school in 2004, the estimated cash flow cost of completing their education in 2020 would be approximately $270,000. For a child starting pre-school in 2018, that amount has increased to $605,000. Similarly, in 2020 the amount required to educate a child at one of these schools will require a cash flow outlay of approximately $680,000!
Multiply these amounts by the number of children / grandchildren you intend funding and it is evident that some difficult choices may have to be made. For parents, the choice may include:
- Delaying the decision to have children, whilst establishing an education fund,
- Delaying sending children to Private School until High School ie year 7,
- Borrowing money using a mortgage against the family home,
- Selling the family home, renting and utilising sale proceeds.
For most parents, the ability to access Private Schooling for their children will be dependant on sustainable high earnings from either one or both spouses and / or access to other investment income streams – either personally or via the broader family.
For grandparents, the choices may include utilising retirement resources, possibly placing a comfortable retirement at risk.
Given that moving schools can be disruptive for children, a thorough assessment of the costs associated with education of this nature is required, before a commitment is made.