K-12 Private School Financing

Q. We are thinking about sending our son and daughter to private high school but are concerned about the expense. How can we afford it?

A. The Council for American Private Education reports that 11% of all students from prekindergarten through grade 12 attend private schools. Private school is a choice parents make for many reasons, from class size to program opportunities.

The choice of private school does come at a financial cost. And contrary to what you might expect, most attendees are not from wealthy families: The majority of kids in private schools belong to the middle- or upper-middle class layer, not the wealthiest. Tuition comes from savings, second mortgages, scholarship programs, and private loans. Here are four avenues to consider:

  1. Private schools commonly offer some kind of financial aid, based on merit or need or some combination. Some families receive outright grants for full tuition.

  2. Private schools also may offer tuition payment plans to help families manage expenses.

  3. You can pay for the costs of attending private school with a Coverdell Education Savings Account, or what used to be called an Education IRA (individual retirement account). It's not just for college. (Starting in 2011, withdrawals from Coverdells to pay expenses from kindergarten through 12th grade will no longer be tax-free, unless Congress extends that benefit.)

  4. One financing option is a credit union home equity line of credit. That would allow you to draw funds as you need them for tuition, while you're also repaying—and replenishing—the credit line.

Harvard University Credit Union personal finance specialists can help you with options No. 3 and No. 4. For more information, stop by any of our branch locations, email us or call us at (617) 495-4460.


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