Private school fees are becoming too high to justify

With Australian real household disposable incomes lower today than seven years ago:

The AFR reports that private school fees have risen at roughly twice the rate of inflation every year for the past decade:

Edstart, which lends money for education, says private school fees have gone up 3.1 per cent this year – nearly twice the rate of inflation…

A survey of 1600 families by the company across the nation showed that private school fees consumed 35 per cent of net family income, and in South Australia and Victoria the figure was close to 40 per cent…

Edstart chief executive Jack Stevens said parents had always felt school fees were a burden but a decade of fee increases running above inflation had them “up in arms”…

Not surprisingly, then, private school enrolments are sliding in favour of the public school system:

The proportion of children in government schools grew in 2017 and 2018, Census data shows, ending a run that stretches back to 1970 in which private schools increased their share of Australia’s student population.

Analysis by ANZ reveals that it is mid-tier private schools, which charge between $10,000 and $20,000 a year in tuition fees, that have been most affected by the shift…

Census data shows that between 1970 and 2016 the proportion of Australian schoolchildren in government schools declined from 78.1 per cent to 65.2 per cent.

But in 2017, the government sector increased its share to 65.6 per cent, rising to 65.7 per cent last year, in the first consecutive year-on-year rise in the past 50 years.

“While the structural shift towards non-government education has been evident over the last three decades, the trend appears to have halted,” the ANZ report said.

Evidence suggests that the academic benefits of private schools are, at best, very marginal (see here).  While at the same time, the costs of private schools are becoming difficult to justify.

Therefore, with private school fees rising inexorably and household incomes stagnating, expect many more Australian families to choose the public schooling option.

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. This is good. Hopefully the fees rising mean that only the proper-rich people will be able to have kids at private schools.

    This will make a private school name a more reliable signal on the CVs. A brighter line for the riff-raff / non riff-raff divide, if you will.

    • TailorTrashMEMBER

      Damn right Peachy…,,.,we need to have …Eaton ,Oxford and The Guards for all right thinking chaps in Straya too.

    • Yes, but this is the plan –
      private school fees should be high enough to keep them for the elite – the “high wealth” individuals. As noted the
      Currently some middle class by working 2 jobs get in and may get an opportunity. The plan is to price them out.
      The 10K a year govt subsidy per student, which in many cases is higher than the whole public school support, should be kept as high income welfare. The elite also plan , naturally enought , to maintain the good jobs for their children.

      The model is Like England and Oxbridge, where the plan to let some kids in to be changed into members of the English ruling class that brought giants like Boris, who can quote classics to his business “partners”, but can’t do basic math. The better egalitarian plan would be to raise all the boats, rather than give a few with enough money a chance to get on the one boat.

  2. People will pay so they dion’t have to have their kids rubbing up next to all those vibrants

      • John Howards Bowling Coach

        Wrong, it is the vibrants who are lining up en mass to enrol their offspring into these overpriced places

          • John Howards Bowling Coach

            I live right smack in the middle of the ‘elite’ school territory of the Melbourne Inner East and the vibrants are thick on the ground in the schools around here. Also lining up to hand of $80k pa to send them off as boarders to Geelong Grammar etc.

            However your point is also worth considering to also note that Melbourne’s elite government schools are flooded by Vibrants making great use of the tax dollars that they never will pay (of course that is really a joke because the Elite schools are actually picking up more government funding than the public schools – vomits into hat)

  3. It really does feel like we are moving to a more feudal society, the middle class is slowly shrinking with you either being super rich or living pay cheque to pay chaque with fewer people in between.

    • It’s a stonewall fact that the middle classes are shrinking in most of the Anglophone countries — not sure about the Europeans.

      Middle class incomes (and savings) are effectively being consumed by the wealthy (via both large mortgages + stagnating wages as a result of globalisation). You can blame the post-1971 monetary system for that. Front and centre.

      • That is exactly what is happening. The unions brought us the strong middle and working class by artificially restricting the supply of labour. Now that labour is no longer being artificially restricted (which is natural state of human kind) we return to a feudal society. Or more accurately a return of capital holding all power over labour.

        Never know, we may have a return of the plague, that helped labour gain power over capital for a time too. Being that at the time 60% of labour was killed off so they became an expensive commodity for a while.

        • I believe the only way to reverse it is to create trading blocs between similar anglo nations.

          I.E USA, Australia, New Zealand, Canada and the UK can all trade freely.

          Every other nation will be subject to tariffs on a sliding scale when dealing with any of the above nations.

          If your average wage is 10% lower than determined appropriate by the ‘bloc’ you cop a tariff on all products of x%
          If you emit x amount pollution your tariff goes up,
          If your human rights obligations are not up to scratch you cop a tariff

          etc etc…

          Each year every nation is reviewed with their total tariff adjusting for the next year. For example Germany might have 0 tariffs or very low ones as they perform well on the above metrics.

        • Never know, we may have a return of the plague, that helped labour gain power over capital for a time too. Being that at the time 60% of labour was killed off so they became an expensive commodity for a while.

          Robots fix that “problem”.

        • The other theory around to note is that after world war 1 a lot of the disillusioned soldiers became radical in Australia , and after WW2 the cold war fear of communism in the US.
          To placate the masses higher incomes went to the middle classes as a redistribution
          Post cold war this is no longer necessary. So let it rip !

  4. Yep, always have been expensive, that’s the cost of having a great school with smart well paid teachers, discipline, great sporting facilities, support, no political correctness BS and the benefit of the old school tie future contacts. If you ever want to give your kids a proper leg up in life then this is the way to do it. Only people who whinge and complain about them never went and will always be jealous of those who do. Btw each school has scholarship programs for the smart ones from poor families…..

    • Know IdeaMEMBER

      Yes, I was fortunate enough to be the beneficiary of such a scholarship. Conversely, I have not received much benefit from the old school tie.

      • I have Know Idea why you have not benefited from the fruits of your school and scholarship, you make what you can from the offering that was given I guess…I found that being good a sports helped after school finished.

    • robert2013MEMBER

      I went to one. Zero benefits. I hated every minute of it. I considered my peers to be snobbish, entitled, selfish, stingy brats. I have nothing to say to any of them.

      • mild colonialMEMBER

        Also lots of kids I went to school in middle class public school have done well. Doctors, a QC, fund manager, exec producer of Dr Who, radio personality, an NRL Commissioner, a minor tv star.

    • Scholarships are not charity –
      just an advertising and marketing effect for the school, so they can claim more top ATARS.
      Plus they take the best students out of public schools.
      The paid students are subsidising the school image.
      Why do 2 K of the average students fees go to 5% scholarship students?.

    • Correct. Add to which, the extra-curricular activities on offer are generally vastly superior (many public schools barely have any at all).

      And your kids tend not to be exposed to drugs, violence, bullying and teenage pregnancy to quite the same extent.

      The debate is a fatuous one: it’s for every individual to decide whether the cost is worth it or not.

      • I grew up with a whole bunch of kids who went to all the fancy pants schools, I went to public. In my experience you are entirely wrong on the reduced bullying/drugs/teen pregnancy/etc. Only observable difference was how easily the fancy pants schools and parents covered all of that up with some greased plams, lawyers or “gentleman’s” agreements. So corrupt and with all the same social problems, was truly disgusted by the entire private school system.

        • You’re welcome to your views but making sweeping statements doesn’t do your credibility any good. I remember, back in my banking days, listening to some ‘tard at a BBQ banging on about how all bankers were cvnts. Yes, some are but very many are just ordinary, likeable people – a microcosm of society.

          You may have gone to a good public school and that means you were very lucky but there are a helluva lot of public schools out there that are atrocious. A good friend of mine teaches at a well regarded public high school nearby and the social issues he has to deal with day-to-day are pretty taxing next to his real job which is teaching and marking. He and his wife are teachers in the public system and both their kids go to private (high) school.

          Each to his own – whatever works for you.

        • Is that all you have? Truth hurts, doesn’t it.

          Nvm, go to sleep tonight and continue to hold dear your world view – if you believe it strongly enough it must be true 😉

      • In Canberra, the public school kids know that if you want better quality drugs, get them from a private school kid. As for bullying etc, apparently it’s just as common particularly around social status but you’ll never know, reputation to protect.

        • Same problems across the board and yes ‘better drugs’ at private school — sounds a bit like urban myth but makes sense otherwise. The difference is you get a lower dosage of the social issues at private. The poverty, the large numbers of non-English speakers, the cultural divide — these are not issues at private school. It makes for an easier life for the child and parents. That’s all.

          • If sheltering your child from the world is your thing then you’re only setting them up for failure when they enter the real world.

        • I see. So what you’re saying is that all private school students end up as rank failures?

          A quick trawl,through the best paid and most successful people in this country would say otherwise — note I am excluding inherited money. I’m talking people with real jobs. There are failures everywhere in all walks of life. Applying a personal ideological formula to a situation cuts no ice here.

          I think you’d be better off looking at the children of wealthy/ successful people rather than picking on privately educated kids – now there would be some, er, rich pickings for your world view.

          • Never said that. My issue is that parents automatically assume that private education is a road to better life when infact it’s for most, not. Mrs Nut has been a PA to senior partners in some of the nation’s biggest law firms and also workYec for one of the big four. Their main graduate selection criteria: be in the top 5-10% of their graduate class and graduate from one of their preferred universities. What private school you went played little to no part, they want the best and brightest grads.

            My own experience with my son who went to a public school yet is getting better grades at uni than some of his class mates who went the hell expensive private schools. All this tells me is that my son applies himself, not that private vs public is any better or worse. Ultimately it’s the child and how they respond to their environment.

      • They were all at the private school I went to. And at the public schools that my friends went to as well. It just plays out differently. Post school, the drug addicts I knew who got back in their feet most easily had the common denominator if coming from money. I’ve known a few functioning drug addicts with the same good fortune. Regarding the covering up, my favourite was a school mate who kept avoiding expulsion through his dad making impressive donations to the building fund. He ended up becoming a plumber and enjoys it immensely. At the other end, I’ve known others who haven’t had that ability to fail. All it took was a few poor choices and it unravelled fairly quickly. It seems to me that people are people and some are just lucky to have the easier path through life.

    • I must be the exception that proves the rule.
      I went to one of the GPS schools in Sydney.
      School has not come up since I left. No-one I have ever worked with has paid the slightest attention to where I went to school nor I to theirs.
      I wish I had been given the secret password or handshake.

  5. The rich are getting richer, the poor poorer.
    This thematic, plus the number of Asian kids now at Kings school etc etc, it makes perfect sense.
    Geelong Gramar $73,000pa now. Their yr 9 year in the mountain costs $90,000, just for teh one yr?

    • – I had a gardener in Armadale – he had been to Geelong Grammar. His daddy had bought him a house in Richmond – so he only had to buy food, clothes and his truck
      – Gardening in fact is a popular job for those that go to Geelong and don’t like hard work or anything academically challenging
      – Brighton Grammar produces a lot of good tradies – they tend to be nicer to deal with than your average tradie who tends to be a bit rough
      – Melbourne Grammar now produces less and less serious entrants to the professions. They claim a high university entrance rate but unfortunately have a high university drop out rate – but only after they have changed courses about 3 times and have lived off daddy for about 5 years

      • Good points, Gra
        I know a carpenter from Scotch and builders and tradies from Brighton. They’ve all been well set up in life by their parents. Doesn’t make them any better or worse than others, just means they have a few less tattoos

      • John Howards Bowling Coach

        Yes our Gardener is a lovely chap, Old Xavierian I believe, perhaps Old Scotch…

  6. SupernovaMEMBER

    Most middle of the road Catholic schools between $10,000- $20,000/year much better than “identity drowning politics” of public schools; they remain very good value.

  7. My wife got to go to a vibrant school in brisbane. Gang fights between the viets and samoans were interesting lol

    Bris grammar now 25k per year. But qld moving to atar which us a common exam will see these schools less effective imo. Best to spend 2k per year 50 a week on top tutoring than on massive school fees

  8. John Howards Bowling Coach

    I guess in the days of the pay per view universities it has changed, but the numbers didn’t lie in the past. The percentage of first year dropouts in Australia’s universities was far higher for the molly coddled private school kiddies who couldn’t understand why the professor was expecting them to do their own work and research unlike the teachers in their ‘elite’ schools who are expected by the fee paying parents to ensure little William and Kate achieve a high pass rate.

    • Those kids wouldn’t have miraculously become university ready in public schools though. The only reason they had any chance at all was that they were spoon fed their HSC results in a private school. There are others though, I suspect (can’t prove), who would not have got within a bull’s roar of a decent uni without private school support and who then take that chance and turn themselves into something. It’s the parents of those kids who really get their money’s worth, assuming their little Xavier or Matilda actually likes what they turn themselves into…

      As a parent with the means it’s all about risk management. Do you think your kid can get there 100% under his/her own steam? If you’re wrong, would you forgive yourself for pinching the pennies? Are you prepared to put in the work/attention yourself to make sure they reach their potential (tiger mom styley) if the school won’t do it? Or is it survival of the fittest and let your kids just scramble themselves up the best they can … they’ll end up where they belong somehow?

      • John Howards Bowling Coach

        McPaddy I am only lucky that my own child is in the zone for an elite public school so that saves me from the temptation to pay for a private school. However the attitude and approach of the parents to life long learning, finding and focussing on a passion, having a purpose in life, and valuing excellence, is of at least equal value in what life my child creates for themselves. I count myself very lucky that my own parents had both a good education and valued learning, I feel that has been one of the decisive factors in my own life. That is truly one of the key features of, for example, the Jewish and Chinese families, the valuing of education by the Parents & Culture. In the end most people will do nothing with their lives and the only thing that prevented them from being an Elon Musk for example, is themselves.

        • You are right that the parents’ involvement and example are critical to how the children develop. I have some friends who really live this ethos and it’s certainly not expensive at all. It is quite a big ask in terms of time though, and a totally different way of living. Personally, I’d rather have that time for making a bit more money, but it comes down to personal preference in the end. Making the money in a more stressful job means, in the end, less energy to devote to finishing off the education process. And the extra money you make gets sucked away into a school to make up for the time you don’t have so…

      • plebngineerMEMBER

        Went to a private Catholic myself. Don’t understand this spoon fed HSC results thing that gets thrown around! Don’t recall being spoon fed shit.