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.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.