In today’s economy, financial aid for private schools can feel non-existent. This is often the case because tuition assistance can barely be enough to chip away at the large price tags many schools boast. However, there are many financial aid options available to parents, but some research will be required.
If you are a parent seeking private school tuition assistance, you’re not alone. Many parents want to send their children to a private school, but the tuition bill is enough to scare them away. This is the number one reason why so many families send their children to public schools, where funding is available and there are no tuition fees.
According to the Education Data Initiative, “$12,790 is the average annual tuition among the nation’s 24,090 private elementary and secondary schools in 2021.” Depending on what state you are in, this price can go up. As an example, one of New York City’s elite schools, Dalton, costs $55,210 for the 2021-22 school year.
There are many options when it comes to paying for your child’s education. Options include loans, scholarships, vouchers, financial aid, and several other things.
Finding Financial Aid For Private Schools
Private school financial aid eligibility may be an issue for your family if your household is over the threshold. However, you still have plenty of options that may include personal loans, payment plans, and possibly borrowing from your home equity.
Below, we will explore some of your options as a parent when it comes to financial aid for private schools.
Check With The School
The first step that parents should take in funding their child’s private school tuition is through the actual school itself. According to statistics, about 28% of students who attend private schools receive some type of financial assistance. This number increases according to each school. Highly sought-after schools may have a larger percentage of students who are attending with the help of financial aid.
It is worth checking out each school and what they have to offer your family as far as financial assistance goes. Many schools may offer partial or full scholarships that will allow your child to attend their facility with little to no cost.
Most private schools will have advisors who can go over your options when it comes to paying for tuition. So, if you feel lost as a parent, it would be a great idea to schedule a meeting with these advisors to help point you in the right direction.
Scholarships
Many parents are aware that scholarships exist, but have the preconception that scholarships are only for colleges or universities. Scholarships are tax-free assistance that can cover part or all of the cost of your child’s private school tuition, as well as other schooling expenses.
This will take research on the parents’ part, as many nonprofit and private organizations offer a variety of scholarships to help offset the cost of tuition. Scholarships can help pay for tuition, fees, and other educational expenses.
Parents may find that scholarships are offered by the school, alumni groups, private companies, community groups, professional organizations, as well as large corporations. Explore all options when it comes to scholarships because this is money that you will not have to pay back and is readily available to the public.
Scholarships are available for all types of students. You may find educational scholarships that are merit-based, as well as athletic-based. There is no end to the type of scholarship that you may find once you start looking.
Education Savings Accounts (ESA)
When it comes to financial aid for private schools, ESA is an excellent option. The ESA will allow a family to take their child out of public school and use the “per-pupil school government funding” to pay for their child’s private school tuition, online courses, or use it towards other costs associated with their education.
The ESA money will go into a government-authorized savings plan, and the family will be able to withdraw it to cover qualified educational expenses. Any unused money may be used for future educational expenses, including higher education, certifications, and other training.
Grants and Assistance Programs
Depending on where you live, your family may have access to several educational grants and assistance programs. These may be offered by local organizations, community programs, as well as through the government.
This is money that parents can access but will not need to pay back. So, you want to take advantage of this type of financial aid for private schools. Depending on the type of assistance you receive, it may offer a one-time payment, or it could be renewable each year if your family falls within the program’s guidelines.
Tax benefits
What many parents fail to realize is that private school tuition may be tax-deductible. However, your family would need to qualify for that federal tax break, which is granted for private school tuition and other expenses.
One good example is a 529 account, which is an investment program that allows parents to save money for educational expenses. This money goes into a tax-deferred account, and withdrawals are tax-free. This account will grow each year from your income taxes. You can access the money for qualified expenses.
While these accounts were created to help with college expenses, an amendment was made in 2017 that allows the money to be used for public, religious, and K-12 private schools.
The 529 account can be set up by the parent for each of their children. Parents or other relatives may contribute to the annual gift tax exclusion each year. For example, in 2024, the maximum contribution per child was $18,000. If you have a special needs child, you may also be eligible for individual tax credits and deductions, as long as you have a doctor’s referral that states your child requires the assistance of a special needs private school.
Payment Plans
If financial aid for private schools is not available for your family, you may look into the school’s financial payment plans. This will give you some time to come up with a chunk of your child’s tuition without having to pay for it all at one time. It will all depend on the school as to what type of payment plans they offer. Some may do it quarterly, while others may only split the cost into two payments. Either way, it will give you some time to save up some money for your child’s education without having to pay it all upfront.
You may be required to make a down payment and then spread the cost over several months. Payment plans will range from two to ten payments.
Personal Loans And Financing Options
Financial aid for private schools may not be an option for your family. In this case, you can look at getting a personal loan to help cover the cost. Most unsecured loans will come at a higher interest rate, so be aware if you are exploring this avenue. The loan amount and the interest rate you receive will be based on your credit score, income, and several other factors. Keep in mind that there is no guarantee that you will get approved for a loan to cover your child’s tuition costs. Also, you will have to apply for a loan each year your child attends private school.
Home Equity
Home equity loans can be a great option for families who have built equity in their homes. These loans typically come at a much better interest rate and with low monthly payments. Be sure to call your financial institution to discover the benefits of a home equity loan to pay for your child’s private school tuition.