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Globe Wealth The cost of private school can run far deeper than tuition in fees, fundraising and excursions

Liz Falconer budgeted $120,000 to send her son to private school for five years. She made it to three before the funds ran out. "I burned through my pot of money.”

Ms. Falconer, who lives in Toronto, enrolled her son in private school in grade 7 to give him access to top-of-the line academics and extracurricular activities like the sports and music programs. She also wanted him to forge important friendships that would serve him well later in life. "The contacts are pretty important and I wanted him to get that,” she says.

But she underestimated the costs of private school – the fees, the fundraising and the excursions. "There were trips to Quebec City, to Ottawa – but on Porter,” she says. "It was $1,200 for three days.”

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After the three-year stint, she decided to enroll her son in a public school where he finished grades 10 to 12.

“It’s an environment where it’s a bit of a menu,” she says of the private-school system. "You can do this and that. But you have to look at the value equation.”

Deciding whether to send a child to private school is a significant financial decision for a family, and cost is something that parents often underestimate. They focus on tuition and falsely assume that extra fees may total a few hundred dollars. But private-school costs can include thousands in initiation fees, equipment and extracurricular events such as trips and overseas travel. Though many of these costs are not mandatory, the social pressures of the classroom – and the deep pockets of their peers – may force parents to feel like they have to pay more than they intended. It’s something financial planning can alleviate.

Ms. Falconer says that private schools routinely ask for annual donations. Though donations aren’t mandated, some families donate $50,000 annually. “It can get competitive.”

Dianne White has been on both sides of the private-school equation, as a parent and an adviser. Having put her kids through the private system, she now counsels clients weighing the decision as a certified financial planner at Nexus Investment Management in Toronto.

She’s frank about the different fees at different schools: "They don’t all cost the same amount,” she says.

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Ms. White suggests clients start the process by thinking long-term, deciding how long they plan to keep their kids in private school. If a child stays in private school from junior kindergarten until grade 12, for example, parents can be on the hook for $500,000 in just tuition, which averages $30,000 a year, according to Ms. White.

Even if they plan to enroll their children for several years, parents need to remember that the cost of tuition will be indexed at 3 per cent a year, says Ms. White.

Plus there are the initiation fees which can be hefty – but are only paid once upon admission. These can be as little as $500 and as much as $8,000.

In addition to initiation fees, there are registration fees paid upon acceptance – usually several hundred dollars – technology fees to rent laptops and receive IT support, book fees of $300-$500 per year; before-school and after-school care, meal plans, the costs of sports team equipment, as well as tournaments and travel, which usually total $500-$1,000 per term for competitive teams but can go much higher. School-led dramatic productions can also involve fees for costumes, as can being a member of an orchestra, which can involve payments for instruments, competitions and travel abroad.

“You’re walking into this world where you know there are going to be extras," says Ms. White. “It comes down to what the child is into."

While all of these added costs can total $5,000 to $10,000 a year, there are ways of mitigating these fees. One option is to declare before-school and after-school care as a tax credit for childcare. Another option is to investigate financial aid. And for parents weighing International Baccalaureate (IB) schools, which are generally more expensive, there are some tax breaks, says Ms. White.

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“For schools offering the IB, in the later years, higher-level courses qualify as university equivalents and you might be able to claim the tuition and education credit,” she says.

Sonia Keuroghlian has two kids who attend private schools, having herself graduated from the Toronto French School in 1996. "Costs have changed,” she says. “Before we started I didn’t realize how much the additional costs were.”

On the upside, Ms. Keuroghlian is pleased that the costs of extracurricular programs such as art and dance classes provided by the school are often a lot less than external programs, a sentiment echoed by many parents. "It’s between $150 to $200 per program,” she says. She says the uniforms – a couple hundred dollars a year on average – are also cheaper when you compare them to the costs of funding pre-teen and teenage wardrobes.

Ms. Keuroghlian says the initiation fee was one of the toughest costs to swallow. "I was surprised by the initiation fee because it doesn’t go to anything,” she says.

At Crofton House School in Vancouver, an all-girls private school from kindergarten to grade 12, Patricia Dawson says that the discussion around costs – and financial aid – often comes up quickly when meeting with prospective parents. "We tell them [the costs] as part of admissions,” she says, "because families should know what to expect.”

She says the school recently introduced a bursary program based on financial need. “If their circumstances change, they can apply for bursary support,” she says. “Any family can do that.”

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Ms. White is all for dialogue around fees upfront so that parents find out well ahead of registration just what costs they’ll face in the coming years. While many private schools readily post this information on their websites, for others, the information-gathering process requires more digging – and a phone call or two to the administration.

"Go into it with your eyes wide open,” says Ms. White. "It’s a big financial commitment.”

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