Is a private school education worth the investment?
Private school fees have continued to rise at a rate higher than inflation, with 2019 being no exception, seeing an increase of 3.1% Australia wide in comparison to the inflation rate of 1.8%.
The private school sector provides added benefits for students who attend whether it be educational, sporting, or down to the facilities on offer but why do they continue to rise at such high rates?
As an operator of a private school, the decision on how much to raise school fees by each year is a very methodological process. The core basis of fee determinations largely comes down to funding the sustainability of the school in both its current operations, as well as future developments.
Costs for all schools are non-stagnant, teacher wage costs, utilities costs, repair and improvement costs all increase year on year and schools need to be able to sustain these rises. Over the past decade schools have started to show restraint on the level of rises they are passing on to parents, with the beginning of the decade seeing increases in the range of 5-8% per annum, which can reflect as much as a 5% drop in the percentage rise, in comparison to the 2019 average.
So to be able to sustain the school whilst also improving facilities and providing higher quality services, schools either need to improve their efficiencies or continue to raise fees at a higher rate compared to inflation. But with schools continuing to make significant improvements to their facilities, as well as having their costs increase over the years, what has allowed the rises to drop?
The main contributor to this has to be improved efficiencies within the operations of the schools. However, as the fees still continue to rise at a rate higher than inflation, at what point will parents deem the costs too high for the investment?
It has been reported that Melbourne is the most expensive city in Australia to privately educate your child with an average overall cost in Victoria of $536,683. If you are wanting to know more about the rising costs or have any queries in relation to this article, contact our Audit Specialists for more information on (03) 9835 8200.
