To Afford Private School, High-Income Families Make Lifestyle Tradeoffs

Recent SSS by NAIS studies show that families value receiving clear and helpful information about financial aid when applying to private schools. Moreover, financial aid applicants tend to feel positively about the process and the outcome. Regardless of whether a family seeks financial aid, the studies confirm that paying for private school tuition requires making sacrifices in other lifestyle areas. Overall, families believe these tradeoffs are worthwhile. The second and final part of this series focuses on high-income families and the private school choice. Read part one.


It is perhaps not surprising that high-income parents consider the cost of a K-12 education to be a secondary concern when choosing a school. Just 20 percent in a recent survey said it was a factor in their decision to attend private school. But what may be surprising is that most high-income families are making lifestyle sacrifices to afford private school for their children.

These were among the findings of a 2014 SSS by NAIS study that sought to understand how high-income families approach the decision to send their children to private schools and how they pay tuition. Included in the survey were 756 families whose household incomes were at least $150,000 for parents with one child and at least $200,000 for parents with more than one child.

Ninety-four percent reported that they pay the tuition from their current income, while 25 percent use personal savings and 13 percent pay by means of bonuses/profit sharing plans. Only about 8 percent of high-income families use gifts from their children's grandparents to help pay tuition, compared with 16 percent of financial aid applicants. Similar to families who seek financial aid, few high-income families rely on loans to help pay tuition costs.

Because high-income families primarily use their income and savings to pay tuition, they manage the cost by forgoing or delaying spending on other aspects of their lifestyle. Of the parents surveyed, 44 percent reported spending less on discretionary expenses such as dining out or taking vacations. Other sacrifices cited:

  • 28 percent said they save less for retirement,
  • 27 percent reported spending less on or delaying new car purchases, and
  • 26 percent noted that they are saving less for college.

Just 35 percent reported that they do not need to make any lifestyle changes to pay tuition costs.

These sacrifices notwithstanding, most high-income parents relate positively to paying for school tuition. Sixty-one percent said they feel thankful to have the means to pay for private school, while 53 percent reported feeling satisfied that they are doing what's best for their child.  Meanwhile, 12 percent said they felt "stressed" about paying tuition, and 8 percent said they felt "worried" about it.

Of all families surveyed, 83 percent said they were aware of the availability of financial aid at private schools. However, only about 10 percent of high-income families applied for merit aid, while 6 percent applied for need-based aid.  Although very few of these families received financial aid (3 percent received merit aid; 2 percent received need-based grants), the families that did gained substantially, receiving aid packages covering an average of 31 percent of the total cost of tuition.

Mark J. Mitchell

Mark J. Mitchell is vice president at NAIS.