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8 tips for fitting private school in the family budget

PrivateSchoolBy Allison Eatough

With annual tuition reaching up to $25,000 or more a year, the cost of private school in Maryland can be intimidating — especially to parents who think they can’t afford it.

“Families often look at the tuition and think, ‘I could just as easily jump over the moon as I could afford this education,'” says Tim Fish, associate headmaster at McDonogh School, a private school in Owings Mills.

But don’t let the initial sticker shock fool you. There are plenty of ways to make private school more affordable, Fish and other local private school leaders say. Families just need to know where to look.

“There is an element of sacrifice that is embedded,” Fish says. “But I think it’s incredibly worth it for the kids.”

Here are eight tips for fitting private school in the family budget.

1. Prioritize

Before venturing down the private school path, look at your family’s overall finances, says Patrick Collins, partner and managing director at Greenspring, a wealth management company in Towson. Determine whether or not private school tuition will impact the overall family life now and 10 to 20 years from now, he says.

Recognizing the financial commitment ahead of time is an important step, he says. Collins typically advises his clients not to go into debt just to afford private school and to avoid dipping into retirement or college savings.

“It comes down to priorities,” Collins says. “Is sending your child to private school more important than retiring at age 65? There’s no right or wrong answer. It’s just what takes a higher priority for the family.”

2. Start saving

One of the best ways to pay for private school is to plan early and start saving, says Jim Kantowski, a financial planner, accountant and owner of JSK Financial Services in Annapolis.

While “the opportunities to save from a tax perspective are limited,” Kantowski suggests parents look into a Coverdell education savings account (ESA). This investment program allows parents to withdraw money tax free as long as the account’s beneficiary uses the money to pay for qualified education expenses, such as tuition and books. For example, if parents put in $1,000, and it grows to $4,000, they may be able to take the entire amount out for education expenses without paying taxes on the growth.

ESAs, which are available through most financial service companies, can be used toward kindergarten through 12th grade tuition as well as college and graduate school. Still, there are limits based on parents’ income. If adjusted gross income exceeds $95,000 or $190,000 if married and filing a joint tax return, parents are no longer eligible to contribute. In addition, the account can only accept $2,000 in contributions a year. So, the earlier you begin contributing, the greater chance you will see the account’s investment value increase.

3. Cut back

Many families with children in private school cut back on spending.

“Give up trying to ‘keep up with the Joneses,'” says Sue Sontag, an Elkridge resident whose two sons attend Our Lady of Perpetual Help in Ellicott City. “You have to make sacrifices. Fewer, cheaper family vacations. Less eating out. Smaller TVs. No unlimited data plan cellphones.”

Katie Gore of Baltimore agrees saying, “We’re almost done putting our second through Loyola Blakefield. We put all our money into the boys’ schools. No big home repairs… No week-long beach or ski vacations. So far, we think it has been worth it.”

In addition to cutting back on vacations, Shannon Coleman pays bills like car insurance six months in advance, saving money on her premium. The Baltimore mother also buys in bulk whenever possible and works part-time as a nanny, putting any extra money toward her 14-year-old daughter’s education at the Catholic High School of Baltimore.

“It’s been hard,” she says. “(But) it’s worth it if you can make it happen.”

4. Check out multiple schools

Tuition costs vary by school, as does the amount of financial aid available.

This year, Severn School tuition ranges from $16,430 in kindergarten to $23,865 for middle and high school, and school awarded more than $2.5 million in aid. At The Key School, tuition ranges from $17,000 for kindergarten to $25,900 for high school, and the school awarded more than $1.7 million in aid.

At Archbishop Spalding High School, tuition is $14,100 and the school has awarded more than $2.5 million in financial assistance and scholarships. Tuition at Riverdale Baptist School in Upper Marlboro ranges from $9,804 to $10,980 for high school and while the school does award aid, the numbers were not available.

Molly Green, director of enrollment management at Severn School, recommends families visit several schools to find the best fit.

“Don’t ever not look into a private school for a child simply because you don’t think you can afford it,” she says. “Look at different schools. Have a face-to-face discussion with the financial aid folks and find out the process.”

Lee Conderacci, director of enrollment at The Catholic High School of Baltimore, agrees saying, “The best thing to do is take a day, come and visit and see if you can see yourself here. … Then, we’ll see if we can make it happen.”

5. Apply early for need-based aid

Don’t wait for the school acceptance letter to arrive before applying for financial aid. Applications for need-based aid are often due months before schools notify families of admission decisions.

Most private schools use a computer system to determine how much a family can afford for tuition. At Severn School, The Key School and McDonogh School, leaders use a National Association of Independent Schools (NAIS) system called School and Student Services (SSS). The system considers everything from annual household income and family size to monthly mortgage payments. For example, if SSS says a family can afford $10,000 a year for tuition, but the tuition costs $15,000, the family qualifies for aid.

“Applying for financial aid doesn’t mean you’re going to be eating Ramen noodles,” says Myra McGovern, NAIS spokeswoman. “We really encourage people to apply and see what they might be eligible for.”

Still, qualifying doesn’t ensure families receive assistance. A recent NAIS study found a typical NAIS member school is only able to meet 70 percent of financial need for families who qualify.

“More people apply and more people qualify than we have funding for,” Green says of Severn School.

Schools allocate aid based on the amount available each year. At The Key School, that means some families may receive a few hundred dollars in aid while others receive thousands, says Jessie Dunleavy, assistant head of school for enrollment management. “The range is huge,” she says.

And remember to apply for aid each year. Families who don’t qualify one year may qualify the next, especially if they have two or more children of school age.

6. Ask about merit-based scholarships

Some schools, like The Catholic High School of Baltimore, offer merit-based scholarships.

At Catholic, merit scholarships range from the $1,000 Mission Scholarship for students who are well-rounded and exhibit academic excellence, leadership and community service to the full tuition Mother Generosa Scholarship, which goes to a student who scores in the 99th percentile in testing, is involved in extracurricular activities, performs community service and has a grade point average of 4.0 or higher.

Merit scholarships are renewed annually, as long as the student maintains a 3.0 cumulative grade point average, says Lee Conderacci, director of enrollment.

7. Family help

Extended family members, including grandparents, may also give money toward a child’s education, McGovern says.

“They might have a more flexible income than their children,” she says. In many cases, grandparents are already planning to leave their grandchildren money when they die. “This gives them something to see the benefits of while they’re still alive,” McGovern says. If grandparents pay tuition directly to the school, taxes would not apply, she says.

8. Tuition discounts

Several area private schools offer tuition reductions for families have two or more children enrolled. For example, The Key School offers families a 5 percent tuition credit for the third child enrolled and a 10 percent credit for the fourth.

At Fairhaven School in Upper Marlboro, tuition for the second student enrolled is $8,059 – about 15 percent less than the first student’s $9,482 tuition. For the third student, tuition costs $5,689 – about 40 percent less than the first student’s tuition. In addition to tuition discounts for each additional child, Riverdale Baptist School in Upper Marlboro offers a 10 percent tuition discount for students of alumni parents.

According to a 2006 National Association of Independent Schools study, 32 percent of the general public would prefer to send their children to independent schools if cost and distance from home were not barriers.

Be sure to check out our listing of Maryland private schools.

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