Sept. 22, 2018
Paying private-school tuition fees can be a big financial ask for families from all income levels. Sending your child to a private school in Ontario, for instance, could cost between $10,000 and $50,000 per year, not including textbooks, uniforms and laptop, among other necessities.
Money is the biggest barrier for Canadian families who want to send their children to a private school. Yet, much of this barrier is rooted in misconception and a lack of awareness. For starters, a Statistics Canada report shows families at both the high and low ends of the income spectrum with children in private school. In fact, as many as 30 per cent of children who attend private school come from families with an annual income less than $50,000.
Evidently, you don't have to be a millionaire to put your kids through independent schools. Some under-the-hood knowledge and strategic planning can go a long way in shoring up the necessary funds. Here are strategies to consider:
Save aggressively: Obviously, the earlier you start saving money, the better. After buying a home, your biggest expense should be your child's education.
No matter how big or small, save a portion of your monthly income religiously. Set up a high-interest savings account and sock away a predetermined sum through an automatic transfer on your payday. And if grandparents or other relatives give your child money on special occasions, save that, too.
Make and stick to a budget: Tighten up recreational spending, for example, by skipping fancy vacations, putting off buying big-ticket items such as electronics or a luxury SUV, or eat out less often. Clip and use coupons, and seek out bargains. Switch to a bare-bones cellphone plan and whittle down your cable subscription. These changes can save thousands of dollars each year.
Invest: Financial experts argue that cash is a poor savings vehicle and recommend putting that money to work by investing. The magic of compounding could work even better when you park some of that money in faster-growing investment vehicles such as stocks and mutual funds.
You could hold a range of investments in a tax-free savings account (TFSA) and have your savings grow over time, tax-free. If the annual TFSA contribution room is maxed out, you could let the surplus savings flow into a non-registered investment account. Either way, put your money to work and optimize your saving efforts.
Tax advantage: Provided you don't exceed your annual contribution limit, your entire TFSA savings grow in a tax-free environment. Later, all of your TFSA savings can be withdrawn tax-free. Parents can also claim a tax credit for private-school tuition as a charitable contribution.
In schools with religious affiliations, a portion of annual tuition fees is eligible for a charitable tax receipt, says Sarah Scandrett, head of admissions and enrolment at St. Mildred's-Lightbourn School (SMLS), an all-girls school in Oakville, Ont.
The eligible amount, calculated annually and dependent upon the school's operating results, has in the past "ranged up to 15 per cent of tuition," she adds. In the cases where both parents are working, they may be "entitled to deduct a portion of the school fees paid as a child-care expense if their child is 16 years of age or under," says Scandrett.
Bursaries and financial aid: Many private schools offer financial aid. Those who qualify may be offered financial aid that could cover anything from 10 to 100 per cent of the tuition fee.
"Our school does offer financial aid," says Scandrett, noting that as many as 46 students were awarded financial aid totalling about $425,000 last year alone.
To apply, families need to submit an application to Apple Financial Services, which reviews the application and reports on the eligibility to the school.
The school "distributes awards as broadly as possible and the amount of tuition that it covers varies depending on need," explains Scandrett.
"Each year, we are able to offer financial aid to deserving pupils who otherwise could not afford an SMLS education, so that exceptional young women have the opportunity to both enhance their lives and enrich the unique culture of SMLS," says Scandrett.
Many schools offer bursaries, which are discretionary sums of money awarded to top up financial aid for deserving and needy students of modest ability. A combination of financial aid and bursaries could offer a far more significant financial relief than many parents imagine.
Marilena Tesoro, head of Holy Name of Mary College, an independent Catholic school for girls in Mississauga, says financial assistance from private schools can come in many shapes and forms. For her school, financial aid could include "tuition assistance and bursary support, athletic and academic scholarship offerings, payment plan options, sibling discount, subsidy for books and uniforms," among others.
Finally, it's not uncommon for private schools to offer flexible payment plans, and some schools may make concessions for parents who are part of certain religious organizations or armed forces, as well as those working as teachers within the private-education system.