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How to pay for private school

Rainboats line the wall at Sidwell Friends School,  a Quaker private school located in Bethesda, Maryland and Washington, D.C., offering pre-kindergarten through secondary school classes. (Photo by Brooks Kraft LLC/Corbis via Getty Images)
Rainboats line the wall at Sidwell Friends School, a Quaker private school located in Bethesda, Maryland and Washington, D.C., offering pre-kindergarten through secondary school classes. (Photo by Brooks Kraft LLC/Corbis via Getty Images) (Brooks Kraft 2011)

(CNN) – It's the time of year when private school applications are coming due. After the acceptance notices arrive, parents will only have a matter of weeks to decide between shelling out for tuition or sending their kids to local public schools.

Studies show that children who attend private school experience better long-term outcomes in terms of college success, their well-being and career satisfaction than children educated at public schools. But other research shows those differences are eliminated when you control for family income and parents' level of education and that there is no evidence to suggest that low-income children or those enrolled in urban schools benefit more from private school enrollment.

What everyone can agree on is that private school can be expensive. While some prestigious private schools can run more than $50,000 a year, the national average private school tuition is $11,012 per year, with private elementary school costing $9,946 a year and high school $14,711 a year, according to Private School Review. This includes religious schools, which typically fall on the lower end of the tuition spectrum.

While some families can easily afford to pay tuition, choosing to go private often involves financial and lifestyle tradeoffs. Here's how to make it work.

Get financial aid

While most parents adjust their spending in some way to afford private school, according to a study by the National Association of Independent Schools, many don't realize that the cost of tuition is not set in stone.

"That tuition number isn't the final answer," says Myra McGovern, a vice president at NAIS. "Most families use a variety of strategies to pay tuition. Financial aid. Outside scholarships. Many families look at different ways they can cut expenses."

The most common funding source is financial aid provided by the school. Aid packages will vary depending on a school's endowment, tuition costs and its aid philosophy. About a quarter of all private school students receive financial aid. The average grant per student during the 2019-2020 school year was $18,717 (not including parochial schools), according to NAIS.

A family doesn't need to be low income to receive financial aid. Parents seeking aid are now wealthier and more educated than in the past, according to the NAIS study. In 2018, 21% of those seeking financial aid earned more than $175,000, while in 2013 only 9% earned that much. This may be a result of increasing tuition costs, pushing those with higher incomes into the aid pool, the study noted.

If you receive aid and the grant still isn't enough, it can be helpful to talk to the school's aid administrator so they understand your full financial picture, said McGovern. "Some schools have additional subsidies for uniforms or books or can offer additional funds for sports and travel."

While borrowing money or taking out a loan may be common at the college level, it's become far less common for K-12 schools, with only 12% borrowing to pay tuition, according to the study. Most of those are taking a personal loan from banks or credit unions, but some are borrowing from family.

Another option is to use funds from a 529 college savings plan. Parents can now withdraw from a 529 plan to pay for K-12 tuition without having to pay a penalty.

Assess the tradeoffs

Even with financial help, paying for private school can mean making some sacrifices.

The majority of parents delay purchases or spend less in order to afford tuition, according to the NAIS study. Nearly 82% of parents eliminate or cut back on travel and dining out, 64% delay or spend less on household purchases and 56% delay the purchase of or spend less on cars.

While no family is going to pay for a private education just by cutting out lattes and avocado toast, families do need to consider how their day-to-day spending will be affected.

"Parents need to ask themselves: Do I value private school enough that I would give up vacations for the foreseeable future?" said Justin Brownlee, a certified financial planner at Brownlee Wealth Management.

Some families opt to buy a home in a less expensive area and put the savings toward a private school education, according to Brownlee.

But there are some tradeoffs to consider.

For example, you could buy an $800,000 home in a notable school district and put your three kids through public school or buy a $400,000 home somewhere else and enroll them in private school. Which one makes the most sense? Most likely buying the pricier home in the good public school district, said Brownlee.

"After all, you still have that equity a decade or two later after the last tuition payment has been made," he said.

But the calculation may be different if you are considering private school for only one child.

"Private school with multiple kids is a big financial burden," he said, "So much so, that it actually might justify a doubling of your house budget."

Employment changes are something to consider as well. For 28% of families in the NAIS study, a parent got a second job or worked more hours to afford tuition and for 12% of families a parent entered the workforce.

Is it a fit for the family?

Anne O'Rourke's two children, now in high school, have attended Catholic private schools in Washington, DC, since they were in pre-kindergarten.

When the children approached middle school, the family looked into the idea of moving to an area with better public schools, but decided against it.

"We are Catholic, so it fits with our faith values, but we also found the Catholic schools to be a great value in terms of price."

They haven't had to make major sacrifices to pay tuition, O'Rourke said, but there have been adjustments.

“If we weren’t paying for school, we’d be taking very different vacations.”