Fees Management
Money, money, money
School fees have continued to rise rapidly in the face of huge increases in costs to the schools themselves. But how will parents be able to continue to educate their children independently, asks Michael Swan
The cost of private education has soared by 43 per cent over the last five years, according to figures released in August this year by Halifax Financial Services.
The rise exceeds the rate of inflation by more than three times during that period and dwarfs the six per cent increase in annual earnings.
From a national average for school fees of £7,275 in 2001, the cost of putting a child through private school now stands at £10,368 per year, with the south-east – where the average fee is £12,237 a year – the most expensive region.
The average annual fee charged for a boarder is now more than 40 per cent higher than the £14,208 annual cost in 2001. This is close to £4,000 a year higher than in the north – the least expensive region – where the average annual school fees are £8,277 a year.
On the up
Day fees now account for 36 per cent of a typical household income in the UK, but rising fees have not stopped the private school population rising by 37,500 since 2001.
The ISC, which collected the data, advise that the steep increase reflects the cost of staff salaries, energy and building costs, all of which have risen sharply in the past few years.
Faced by criticism that the costs are restricting private education to a narrower slice of the population, schools have been doing more to assist parents. The ISC says that nearly a third of pupils have been helped with fees this academic year, and the money on offer is growing.
How do parents cope with fee rises?
For parents whose children are already at independent school, these figures will not come as a shock. School fees have been increasing by more than inflation for several years and parents are using a range of financial methods to ease themselves through.
If parents cannot afford to pay the fees out of income (which the majority do) or savings then they invariably borrow via a remortgage. The housing market appears healthy according to current data, but how long will this last?
Parents who want to send their children to a fee-paying school have been given some hope by news that Eton wants to attract a wider range of boys, but for most the reality lies in searching for the best solutions to a growing financial problem.
Eton said in June this year that it planned to raise an extra £50 million so it could provide fee assistance for about 30 per cent of its boys.
But scholarships and bursaries are reserved for children who are especially bright, gifted in music, sport or the arts or from families on below-average earnings. Most parents will still have to find the money themselves.
A rock and a hard place
The majority of schools are caught between wanting to help parents wherever possible, but are simply not able to help everyone who asks for assistance because of the obvious financial constraints.
The recent Office of Fair Trading investigation has concentrated the minds of schools when it comes to setting school fees, but how parents can continue to afford them is the real issue.
Annual returns
It is amazing to think that not too long ago, school fees were set and paid annually. Fees continue to be set annually but are now paid, in the majority of cases, on a termly basis. How long until fees are collected monthly by the majority of schools?
This current debate about school fees is not new, however, as Michael McCrum, the headmaster of Eton, argued in 1976 that if boarding fees reached £3,000 a year, “it seems unlikely that English parents would be able to keep their sons at Eton or, indeed, at any other independent school.”
Thirty years on, boarding fees are well over £20,000 a year and yet independent schools are still doing rather well.
Michael Swan is managing director of HTC, specialists in monthly fee schemes for independent schools and their parents. He can be contacted on michael.swan@pcl.co.uk
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