That means over a nine-year period parents will end up spending $72,000 per child — as long as tuition rates never increase. (Insert laugh track here.)
Of course, most parents end up considering private education because they only want what is best for their child.
Well, today I’m going to show you why private school is absolutely not worth it – not only for my kids, but yours too. Well, that is unless you’re so wealthy you not only burn $100 bills to light your cigars but you also pay the neighborhood kids a weekly stipend to stay off your perfectly-manicured lawn, in which case it really doesn’t matter.
A Little Perspective
First off, let’s keep things in perspective here. I guarantee you that private K-8 schools aren’t teaching your 10-year-old even the most basic engineering skills required to build, say, a communications satellite.
I can also assure you that after completing a nine-year private school curriculum — and spending an average of $72,000 in the process – your child will still be unable to remove a brain tumor, argue a case before the Supreme Court, or have the business acumen to run a Fortune 500 company. That’s because, for the most part, K-8 private schools are still teaching the same stuff that the public schools do: basic reading, writing and arithmetic.
Yes, I realize most K-8 private schools have benefits like low teacher-student ratios and fancy computers in beautiful buildings with all the amenities — but in the end they’re still just teaching the basics.
Who cares if Junior ends up reading in kindergarten instead of first grade, or learning algebra in fifth grade instead of seventh like his public school peers? Does that really matter in the grand scheme of things? The learning process is supposed to be a marathon — not a sprint.
I’m certain there are many folks out there who disagree with me. And I’m sure that many of you will try and make the case that private schools provide intangible benefits that a public school can’t. Fair enough.
But it’s hard to argue this fact: private school costs more money than most people realize.
To prove it, I am going to do what most people fail to do before committing to send their kid to private school for nine years: estimate the opportunity cost of investing the money and sending a child to public school instead.
Why Private Schools Cost More than You Think
Let’s stick with our basic assumptions above. That is, let’s assume that instead of paying the private school $8000 in tuition each year, we faithfully invest the money into a fund that earns a modest five percent annual return. Using a spreadsheet, it would look something like this:
Now let’s assume that, for your child’s final four years of school, you decide to make no additional contributions and simply let the money you’ve saved over the previous nine years accrue interest.
Assuming we earn the same modest five percent rate of return, you would have $112,583. That’s a pretty decent start on a college fund, don’t you think?
If we continued to let the money ride for another two years while our child went to a junior college, we’d have $124,123, as you can see here:
Now that’s pretty impressive, but what if we didn’t use that money to pay for college? What if we treated it as a sacrosanct nest egg for our kids instead? What if we thought outside the box, went against conventional wisdom, and gave that money to our son or daughter under the condition that they continue to let the money grow, untouched, until they reached the ripe old age of 65?
If we did, and assuming the money grew at a rate of five percent annually, thanks to the magic of compound interest our child would have $1,115,253 – and that is if he or she never contributed a penny over their lifetime!
Even better, if our child had the financial discipline to contribute $100 per week over those 45 years, that nest egg would be worth an astounding $1,953,679.
Let’s pause for a moment to let that sink in. That’s almost two-million dollars, folks.
Now ask yourself this: How much extra cash do you think your child will earn over his lifetime because he or she went to a private K-8 school instead of a public one? For most people, the answer is not even close to a million dollars, let alone two.
The Bottom Line
I’m a firm believer that a child’s success in grade school is largely a function of their personality and willingness to learn. Kids that have the hunger to learn and thirst for knowledge will excel, regardless of the environment. Parents can help too by steering them away from the video games and nurturing their child’s innate curiosity about the world around them.
So save your money. You’d be doing your kids a bigger favor by using that K-8 private school tuition to save for college or, better yet, help build them a healthy nest egg that they could tap in their retirement years.
And if you’re going to insist that lower student-teacher ratios provided by private schools are essential to Junior’s learning, you’d still be much better served financially by sending him to a public school and getting a tutor.
That is, unless you like getting ripped off.
I’m just sayin’.
(This is an updated version of an article originally written on June 14, 2010.)
Photo Credit: Liz West