Paying for private school can be a stretch for many families, especially over several years, but the economic challenges brought on by the COVID-19 pandemic have made it particularly hard this year.
Some cash-strapped parents are being forced to dip into retirement accounts and sacrifice family plans and events to keep their children in private school amid the crisis. Private schools are also pitching in to keep kids in the classroom this year, including deferring tuition payments and providing more bursaries for families in financial need.
Merit-based scholarships for high grades or athletic abilities are also an option to help cover the cost of elementary and secondary private school tuition, which averages about $21,000 annually for day schools and about $52,000 for boarding schools in Canada, according to Canadian Accredited Independent Schools (CAIS), an organization representing 95 independent schools across Canada.
"[Schools] are trying to work with families individually to say, ‘what do you need and how can we support you in the coming year?’ " says Patti MacDonald, the executive director of CAIS.
About 15.6 per cent of students at its member schools received financial assistance in the 2018-19 school year, or an average per family of just below $11,000, says Ms. MacDonald, who expects the number to be higher this academic year.
In the meantime, some private schools are seeing an increase in new students this year, which Ms. MacDonald attributes to how nimble they were in keeping children learning from home when COVID-19 hit.
“The success of our schools … in the spring has brought many [new] families to our schools in the fall,” she says.
Appleby College in Oakville, Ont., has seen a “significant amount of interest,” in the number of day students this year, especially in Grades 7 and 8, says its chief marketing and enrolment officer Michael O’Connor.
Appleby, an independent school for students in Grades 7 to 12, has about 800 students this year, up from an annual average of about 770. Its day-school tuition ranges from $38,850 to $47,170 and from $63,180 to $77,540 for boarding school.
Mr. O’Connor says about 20 per cent of the student body receives financial aid, about 90 per cent of which is bursaries and 10 per cent is zero-interest loans paid back upon graduation. The average bursary ranges between $15,000 to $18,000 and loans average between $2,500 to $5,000.
The school’s goal is to increase its financial aid to reach 25 per cent of the student body, Mr. O’Connor says, to make the school more accessible. “We think it’s important that our student body reflect the diversity from a cultural and socio-economic perspective,” he says.
“The broader the mix of kids we have here, the better it is for all kids,” adds Appleby’s principal Innes van Nostrand.
The school has added another $500,000 to $750,000 to the financial assistance program this year but hasn’t used up the funds so far. Mr. O’Connor says many parents didn’t tap into financial assistance options due to the effect of the pandemic and instead asked to change their payment schedule or defer payments.
The Calgary French & International School, for preschoolers to Grade 12 students, has been offering “bridging bursaries” since 2016 for parents who need help covering their child’s tuition costs, which range from about $13,640 to $16,000 annually, says the head of the school, Margaret Dorrance.
This summer, the school added a second bursary program to support families financially affected by the pandemic.
While some families have been forced to take their children out of school, at least for the 2020-21 school year, Ms. Dorrance says her school has more new admissions this year than in the previous five years, maintaining its annual average of about 780 students.
The school has also deferred large capital projects, including a new parking lot and playing field, to free up funds to support students, including adding additional resources to make the school safer during the pandemic.
Ms. Dorrance says the choice between “keeping our families and supporting them through COVID, or having the capital project move ahead,” was easy. “I was very much in favour of supporting our families.”
Financial advice for parents looking to fund private school
Parents who either want or need to send their child to private school must understand the long-term costs involved including tuition as well as other expenses such as uniforms and extracurricular activities, says Jason Heath, an advice- and fee-only certified financial planner at Objective Financial Partners Inc. in Markham, Ont.
“It’s a really big commitment for families,” he says. “It’s not the annual cost, but the cumulative cost.”
Parents may be eligible for some tax deductions and credits when sending kids to private elementary and high schools. For instance, a portion of the tuition fees may qualify as child-care costs and be eligible for the child-care expenses deduction. Tuition paid to schools that provide a religious education, with a charitable status, may also qualify for a charitable donations tax credit.
Tuition fees may also be eligible for the medical expense tax credit if the student is attending the school because of a mental or physical impairment. Mr. Heath says in order to qualify for a medical expense, parents may need some form of documentation, such as a letter from a physician, to certify how the facilities or staff are needed because of the child’s impairment.
There are also income-splitting-style tax strategies that some families can use to help pay for private-school costs, says Rona Birenbaum, founder and certified financial planner at Caring for Clients, a fee-for-service financial-planning firm in Toronto. Families can set up a trust to help cover the expenses, “making the after-tax cost of the school dramatically lower,” she says.
However, Ms. Birenbaum says the trust should be about $1-million or more for the strategy to be effective.
She discourages parents from borrowing money to fund their child’s private-school education long term. The compounding interest could really eat into a family’s finances, even at today’s low rates.
“It’s just not where we go,” Ms. Birenbaum says.
She also recommends that parents paying for private school have disability and life insurance to help cover the costs if they should become disabled or pass away.
“If you’re making this commitment to your child and you had a period of disability – or pass away – you don’t want it to force your child out of school,” if the costs can no longer be covered, she says.
The COVID-19 crisis has been a reminder to families of how fragile life and work can be. “We need to be aware always of how financially resilient we are, and build that into our everyday thinking,” she says.