Massachusetts is home to many prestigious private schools with a wide range of focuses. From religious teachings to college preparation, individual assistance with learning disabilities, and more, there is no shortage of alternative educational institutions to consider for your child—especially if you have a unique goal or objective in mind.
Below we’re exploring the common reasons why families choose to send their children to private school and how to cover the costs.
First, Consider Your Reason Why
Parents decide to send their students to private schools for a few different reasons—which can often impact the cost of tuition and attendance.
Four common reasons include:
Religion: Some families prefer to send their children to schools led by a religious organization. In most cases, these private schools incorporate faith formation classes, worship services, or other religious elements into the curriculum. Private schools with religious affiliations are generally more affordable than other non-religious private schools and can efficiently incorporate religious teachings and values that reinforce the family’s at-home efforts on the subject. These schools also typically offer financial assistance through their charitable efforts.
Needs-based: Some students have learning disabilities or support needs that are not adequately addressed in a public school setting. They require more individual attention and learning accommodations. If you’re considering sending your child to private school for a needs-based reason, consult with your child’s medical specialist and district resources, such as SEPAC. They may be able to provide the evidence and context needed to petition your town to make a payment or portion of a payment to a private school if the public school system can’t provide enough resources to support your student. This isn’t guaranteed to work, and can be a long, time-consuming process that may require the assistance of an attorney or specialized advocate. If successful, having the cost of tuition covered or supplemented can be a material savings for a family. Schools specializing in learning disabilities rival the cost of college, with additional cost considerations related to busing and housing if needed.
Gifted: If your student is especially gifted and outpacing the school’s curriculum, they may not be challenged enough in a traditional public school setting. Private schools, particularly those focused on college preparation, tend to have more rigorous academic standards and smaller class sizes—giving them the ability to support students who’ve excelled beyond their grade level. Schools of this nature often encourage families to apply for discounted tuition awarded annually via grants. The decision for how much is given is largely, if not entirely, needs-based. There is the possibility for merit or athletic scholarships, but those may be granted through outside organizations.
Advanced opportunities:
Some private schools are well placed in a desired location, have alliances with colleges or universities which may give a graduate an edge for admission or allows them to offer college-level classes in high school, and may have vast alumni networks. All these advanced opportunities are quite appealing when considering schooling options. This is particularly true when past generations have attended a certain school and they want to offer the shared experience with their children or grandchildren. Parents may also want to send their children to these schools in order to gain access to more extracurriculars and clubs, connections with prestigious organizations or colleges, and otherwise find opportunities to excel.
How to Pay for Private School
Private school is expensive (there’s just no getting around it). In Massachusetts especially, private school tuition is the third highest in the country—averaging $26,203 annually.¹
Over the years, the cost of tuition can easily add up to the cost of a second home (especially if you have multiple children). Paying for private school, while still addressing your other financial obligations and long-term goals (like retirement) can take some strategic planning.
Here are a few strategies families may consider when addressing the cost of private tuition.
529 Plan
Under the 2017 Tax Cuts and Jobs Act, you may use up to $10,000 per year per beneficiary of a 529 plan to cover private school tuition. Note that any other expense aside from tuition—uniforms, computers/tech, transportation, etc—is not eligible.² You may, however, want to check with your sponsoring state’s restrictions, since some states don’t consider K-12 tuition as an eligible educational expense for 529 plans.
Now the question becomes, does it make sense to use your 529 plan funds to pay for private school tuition? Or should you hold onto the funds until your child attends college?
There are a few reasons why it could make more sense to dip into your 529 plan now to pay for private tuition, including:
- The plan is well-funded (possibly even overfunded).
- You think your child may be able to qualify for a scholarship for college (perhaps they excel at a sport or they’re exceptionally gifted).
- You think your child may pursue an alternative path to higher education after school (such as entering the family business or becoming an entrepreneur).
Using an Inheritance or Gift from Grandparents
If your parents (the child’s grandparents) were already planning to leave a sizable inheritance to your child, does it make sense to have the grandparents pay for private school tuition instead? Depending on your family’s unique circumstances, this could be an effective generational wealth transfer strategy for several reasons.
First, it enables the grandparents to see the impact of their generosity first-hand. Plus, they don’t have to worry if the funds will be used in a responsible manner after their passing. Your parents can choose to pay their grandchild’s tuition directly to the educational institution, in which case the money doesn’t have to be claimed on their tax return as a gift and won’t impact their lifetime gifting limit.
Massachusetts does have state estate and inheritance tax, so this is one way to help bring down the size of your parents’ estate (if they’re concerned it may exceed the estate tax exemption limit).
Scholarships and Financial Aid
It’s always worth looking into what sort of financial aid packages or tuition reduction the school you’re considering can offer. Don’t assume that just because your income is high that your family won’t qualify for some financial relief. Every private school is different, but financial aid or scholarships may be offered based on number of children, payment types (lump sum payments vs. monthly installments), medical challenges, or other non-income related factors.
Loans
While there’s no federally subsidized loan option for K-12 like there is for college student loans, you may still be able to take out a K-12 loan through Sallie Mae or other financial institutions. Tread lightly here, as unsecured loans can come with high interest rates and unfavorable repayment terms. It’s always important to be thoughtful and strategic about taking on new debt, as you’ll need to ensure it fits into the rest of your financial picture.
Should You Hire a College Planning Coach?
A college planning coach is typically hired by parents for students in high school, usually starting around ninth grade.
They can help your student with a number of college preparation hurdles and considerations
such as:
- Determining which schools may be the best fit
- Understanding what your child’s interests are
- Navigating the process of applying for scholarships and grants
- Reviewing packages and which schools can provide the best ones (on tuition, room and board, scholarships, financial aid, etc.)
In addition, they can help the student make the most of their high school career by selecting the classes and extracurricular activities that may make them more appealing candidates for college admissions. Therefore, despite the expense of working with a coach, their influence and guidance can pay dividends when it comes to making a high value choice for college.
Paying for Private School? Let’s Make a Plan
If your family is interested in sending a child (or children) to private school, one of the first steps is to consider the cost of tuition and all related expenses (transportation, uniforms, technology, club participation, boarding if applicable, etc.).
It’s not unusual to see annual school tuition exceed the cost of a new car. Before enrolling your child, consider how this additional financial obligation will play into your greater financial plan and future goals (like saving for retirement).
If you’d like to speak to a financial advisor about paying for private school, we encourage you to schedule a call with our team today.
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