The Economic Considerations of Sending Your Child to Private School
Parents and future parents, this is for you.
It is inherent in every parent to want to give their child the best possible opportunities for the future. However, the concern that plagues them simultaneously is whether or not a perceived opportunity is worth the expense. This is becoming a larger concern with parents, who are not sure if they get the full economic value of investment in a private school education for their children.
Pay Your Taxes and then Pay Them Again
One of the biggest complaints about sending children to school is the issue of double-taxation. Parents are automatically taxed on their income, and the taxes are used by the government to fund public schools. For some parents, this is enough reason to send their children to public school. In their opinion, they have already paid tuition.
If you opt to send your child to private school, however, you will notice that the tuition you pay also has portions that are taxed. This is because the school itself needs to pay taxes to the government. In effect, if you send your child to a private school, you are paying their tuition–and all included taxes–twice. This is not even considering the general higher costs for extra-curriculars and field trips that private schools have.
The Wage Gap vs. the Tuition Gap
According to the Institute for Fiscal Studies, students who go to a private school earn 7% more on average than if public school-educated peers who are holding exactly the same jobs in the same companies. Interestingly enough, the kind of schooling the children gain is only part of the secret to their success.
According to the study, what really gives private school students an edge in the business world is the ambition and self-confidence the students walk away with. They know they are considered elite, and therefore radiate confidence. This is an attractive attribute that employer cannot fail to notice. A similar study agrees, putting the wage gap at 12%.
There is, however, a catch to private school education as well. Employees educated in private schools consistently earn more than their peers who were educated in public schools. However, the wage gap will never be wide enough to monetarily cover the extra fees paid in private school. In other words, in any way it is calculated, the cost margin between private and public school tuition will always be much higher than the benefit margin between their average pay grades.
Whose Future is Under Consideration?
Parents tend to calculate only for their children’s futures. In other words, for them, their children’s future earnings are enough. Whatever they spend in the present is a parental cost that should not affect their children at all.
However, they sometimes forget to take future costs into consideration. The best reason for parents to consider their own housing and retirement funds is so they can be independent when their children have left the nest.
A realistic calculation of private school expenses should consider whether or not you will be able to support yourself past working age and your children’s schooling. It is also easier to be financially independent throughout your lifetime.
This post was brought to you by Presbyterian Day School, one of the best private schools in Memphis, TN.