Private school fees rise at double the inflation rate

Fee increases at non-government schools are running at nearly twice the rate of inflation and have outpaced wage growth every year for a decade, adding to cost stresses felt by the 1.3 million families who pay for private education.

Edstart, which lends money for education, says private school fees have gone up 3.1 per cent this year – nearly twice the rate of inflation.

“My husband has to work six days a week. I work from home. I’m reselling on e-Bay to help with the fees,” says Melissa Ellis, with Fletch, 14, and Maisy, 9.  Supplied

A survey of 1600 families by the company across the nation showed that private school fees consumed 35 per cent of net family income, and in South Australia and Victoria the figure was close to 40 per cent.

Some parents were feeling the pressure more than others. Fees at Macquarie Grammar School, a small coeducational school in central Sydney have risen 10.8 per cent this year.

Emmaus College in Melbourne’s eastern suburbs increased fees 6.9 per cent and fees at Stuartholme School in Brisbane’s west went up over 6 per cent.

But the increases are not restricted to top-tier private schools in wealthy suburbs.

Melissa Ellis lives in Canberra with her self-employed husband and four children, three of whom are in the Catholic school system; the other moved to a public college this year.

We live week to week. There’s not much spare money for anything. As parents, you don’t buy yourself much.

— Melissa Ellis, mother.

When all four were in the Catholic system, her annual bill for fees topped $37,000.

“My husband has to work six days a week. I work from home. I’m reselling on e-Bay to help with the fees,” she said.

“It’s not just the fees, it’s all the extras. Camps are between $400 and $700. There are a couple that come right before Christmas. I had a $1000 bill before Christmas and I was still trying to catch up by April.”

The family initially had all the children in top-tier Anglican schools but Ms Ellis said they struggled with the price increases.

They switched to the ACT Catholic school system partly to cope with the fee pressure.

But inflation-driven increases have made that hard too. Moreover, as the children grew older, the base fees started to rise. The annual fees for one of her children started at $1500 but have now hit $8500.

“We live week to week. There’s not much spare money for anything. As parents, you don’t buy yourself much,” Ms Ellis said.

In NSW, where fees went up 3.7 per cent this year, among the highest increases in the country, private schools blamed rising energy costs.

The chief executive of the Association of Independent Schools NSW, Geoff Newcombe, said electricity bills had risen 11 per cent a year for the past 10 years.

“Schools have higher utility costs than most people realise. Energy use rises each year with enrolment growth, technology use and air-conditioning.

“Ausgrid has required many schools to install electrical sub-stations due to their higher energy usage. These can cost up to $400,000 each.

Dr Newcombe said salaries for most school staff went up at least 2.5 per cent and NSW independent schools were servicing capital works valued close to $1.2 billion.

“While official interest rates may now be at record lows, many schools have loans with fixed rates from many years ago,” he said.

“Planning costs have gone up. All new schools are now considered State Significant Development and must be assessed by the NSW Dept of Planning and Infrastructure, which requires more extensive, and costly, expert-planning reports.”

The salary factor

Other education analysts said costs had gone up by a similar level in the public sector. But the rise in the independent sector was more visible because it was embedded in fees, which are published.

Beth Blackwood, chief executive of the Association of Heads of Independent Schools of Australia, said salaries were the biggest single cost factor.

“Most teaching enterprise agreements have salary increases above CPI. And most new teachers have increments in the first eight to nine years of work.

“Independent schools are usually open from 7am to 7pm so costs are tied not just to the school day but to resources.

“There’s more to pay for: co-curricular and community events, after school care, utilities, costs for STEM equipment and new mental health programs.”

Ms Blackwood said some independent schools did not know how they would be hit by the changed government-funding model, which will focus more on family income.

Edstart chief executive Jack Stevens said parents had always felt school fees were a burden but a decade of fee increases running above inflation had them “up in arms”.

“There is no question that for Australian families education is a massive priority, but I’m not sure that everyone is prepared for the financial load.”

Private school fees consumed 35 per cent of net family income nationally, says fee-financing company Edstart.  Dean Sewell

Schools were under competitive pressure to improve facilities and to lower staff-student ratios, which put immense pressure on their cost base. Despite this, there was little evidence of price gouging, Mr Stevens said.

“Top tier schools with strong demand and waiting lists generally had lower fee increases than those schools with available places. You would expect the reverse if there was any evidence of price gouging.

“It’s very clear that fee inflation is driven primarily by the increasing cost of school operations, and in some cases, a decline in government funding.”

The combination of fee increases and the escalation of base fees as children grew older had produced a cultural change, he said.

“A school can’t just fire off a bill for $20,000 for one kid. That doesn’t work any more. They have to spread the load over the term.”

Most Viewed In Policy

Read More

Benjamin Tucker

Benjamin Tucker

I am Benjamin Tucker and I’m passionate about business and finance news with over 4 years in the industry starting as a writer working my way up into senior positions. I am the driving force behind Block Chains Job with a vision to broaden the company’s readership throughout 2016. I am an editor and reporter of “Services” category.

Leave a Reply

Your email address will not be published. Required fields are marked *