How You Can Best Finance Your School Fees
There are nearly 30,000 pupils in Scottish independent schools and last year around one in four pupils in Edinburgh attended an independent school.
The average Junior day school fees sits at around £10,000 per year, while for Senior school this is around £13,500, with prices increasing for boarding schools.
With key P1 and S1 entrance assessments approaching in January, many families will be thinking about sending their children to a private school where they can access a broad all-round education with a diverse subject offering that will set them on course for their future careers.
School fees are a major investment in your child’s future, so it’s important that when considering a private education, you know how to best finance this.
In this blog, we examine how families can most effectively plan and budget for their school fees, what extra costs to look out for and what bursary options are available.
Ways of Budgeting for Fees
First things first, parents should make themselves aware of what the full cost of education will be. Talk to schools to find out what’s included in their fees – for example, they could include tuition only or could include extras such as stationery, textbooks and exam fees.
The full cost could be higher than the initial school fees, with lunches, school trips, uniforms and sports kits being common add-ons to the overall cost of education. Make sure you know about these additional costs so there aren’t any surprises further along the line.
Another thing to consider is that it’s very likely fees will rise year on year, so these rises need to be factored into plans. Generally, schools will keep any increases in line with inflation – roughly a 3% rise per year.
Once you understand the overall amount, take steps to establish a savings plan, whether that be with your standard bank’s savings account or something more tax-efficient like an Individual Savings Account (ISA). ISAs are a great option, they are a form of savings account where you can invest up to £20,000 per year and pay no tax on the interest you accumulate. ISAs are available from most high street banks and other organisations such as the Post Office.
If you are lucky enough to start off with a bigger pot of money, you could consider investing in stocks and shares or other riskier investments, as these could do better for you than savings in the long term. Always get advice from an independent financial advisor before investing.
These days, a lot of parents are getting help from grandparents, who are increasingly involved in paying school fees. Grandparents can make regular gifts of up to £3,000 per year before having to consider inheritance tax. Alternatively, they could put their assets in a trust dedicated to funding the education of the child – this is also a tax-efficient way of passing on assets.
Other financing options include offset mortgages, pension cash and peer-to-peer loans. These are just some of the more imaginative ideas families are opting for to pay for private school fees.
How School Fees Can Be Paid
Generally, you will have a couple of options when it comes to the process of fee payment. One option is to pay in one lump sum at the start of the school year or the start of each term, with many schools offering a discount for doing so.
But the most common way is paying by direct debit which is spread out over 10—12 months. This method makes paying more manageable for the majority of families, spreading the cost throughout the year.
These days, most schools have very tight anti-money laundering processes so it’s not normally possible to make cash payments.
Many independent schools are in partnership with local authorities to provide funded nursery places. At the moment these schemes work by schools charging nursery fees to parents and then claiming funding from the local authority before repaying this funding to parents. There are changes to the rules around partnerships coming into effect in August 2020 and schools are currently reviewing how they will adapt to the changes.
Some activities, such as after school care and holiday clubs, can be paid for by childcare vouchers if your employer offers them.
Can I Get a Discount?
Many schools will offer discounts in particular circumstances. At St George’s we offer discounts for siblings joining the school and have an agreement with Merchiston Castle School where we offer a joint discount scheme for brothers and sisters.
Discounts can also be available for paying the full year’s fees at the start of the year and some schools offer discounts for children of parents from certain professions such as the armed forces.
In addition to discounts some schools award scholarships for outstanding ability in the fields of music, academia, sport or art. Scholarships can take the form of a monetary award or could cover the cost of additional tuition in the area of expertise.
SCIS schools provide around £51 million annually in fee assistance, with nearly one-quarter of all pupils receiving some form of assistance. Every independent school has a bursary pot that is available to support families who need it. At St George’s more than 1 in 10 pupils is in receipt of a bursary and there is no stigma attached to receiving one, in fact very few people at the school, including teachers, will know who receives bursary support.
Which Bursaries Are Available and for Who?
The criteria to qualify for a bursary varies, but it is typically means-tested, with parents supplying information such as their financial details, annual salary and household expenditure.
Schools assess applications based on the overall bursary pot and award them based on a combination of financial need; which pupils will benefit most from an independent education; and who is best suited to the school’s environment. Bursaries can cover up to 100% of fees and are typically aimed at providing more than 80% of them.
There are also some very specific bursaries available, depending on the school, such as a fund for a child who has lost a parent, or if you are from a particular town or region. It is always best to clarify the funding available from each school.
Aside from bursaries, schools offer support in other areas too. Uniform exchanges, for example, are extremely popular – they are run by parents and when a child has grown out of a blazer or sports kit, it can be donated or sold to the exchange. There is absolutely no stigma attached to these exchanges, after all, it is just common sense - children grow so quickly!
Charities also exist that aren’t affiliated to any particular school, such as the Royal National Children’s SpringBoard Foundation, who provide fully funded independent school education for vulnerable or disadvantaged children. The John Watson’s Trust is an Edinburgh-based charity that provides a variety of funding to children who are socially disadvantaged or have a learning or physical disability. Further information is available from the Scottish Council of Independent Schools.
Support for Hardship
Schools have systems in place to support families who have come into hardship, such as a job loss or long-term illness. Most schools reserve a proportion of the bursary fund specifically for hardship funding and take a proactive role in distributing it.
At St George’s, we invite the parent in to talk with our Headteacher and Business Director to find out more about the situation and decide what we can do to ease any hardship. Funding school fees for the remainder of the year is a possible solution, before children can be put into the more formal bursary process. We always encourage parents to be open and honest about any hardship – there is absolutely nothing to be embarrassed about and we are always willing to try to help.
To safeguard against hardship, parents could take out insurance to cover school fees in the event of a job loss, injury or illness – this is similar to the insurance you can take out when covering mortgage payments, and parents can take advantage of this when they start to fund school fees.
Top Tips for Financial Planning
Our Business Director, Jeremy Harper, has some key pieces of advice for parents who are considering an independent school for their child. These include:
Talk – Most importantly, talk to representatives from your shortlist of potential schools. Schools are very keen to offer support in making your decision as easy as possible and can answer any queries you might have.
Start early – The earlier you can start planning and saving for school fees, the better. Aim to have the conversation about your child’s education as early as possible to ensure you are the most prepared you can be.
Research – Doing your homework is essential when choosing the best option for you financially. Spend time talking to different schools and compare their fees – it really helps to write these down, including the cost of extras, and find a total sum.