How to save and pay for private school fees

1 min readLast updated February 23, 2024by Lisa-Marie Voneshen

This article takes you through how to prepare for private school fees.


  • Private school fees can quickly add up, costing upwards of $20,000 per year.

  • If you want to send your children to private school, you should start planning early.

  • There are savings plans and scholarships available that can make saving for private schools a little easier.

  • An expert financial advisor can help you reach your financial goals and help you plan for the future.

How much do private school fees cost?  

According to the Education Data Initiative, the average fee for the nation’s 22,440 private K-12 schools is $12,350 annually.   

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The average annual tuition is $11,660 for private elementary schools, while the cost is $16,144 annually for private secondary schools.

For children who board, the cost rises to over $60,000 per year, with the most expensive boarding school in the US, The Masters School, located in Dobbs Ferry, New York, having an annual tuition of $72,000.

This could rise in the future, increasing the financial burden of sending your child to a private school.

When should you start saving for private school fees?  

This question has a simple answer: as soon as possible.  

With smaller classes, more focus on one-to-one teaching and an array of extracurricular activities, private schooling can enrich your child’s learning.  

So, if you want to send your child to one of these schools, you may need to save a significant amount. Putting money away early is essential.  

It’s also worthwhile having a savings goal in mind. Do you want your child to attend a private K-12 school, high school, or college? Will you need them to board if your top choice is far away? Have you included the cost of additional activities such as trips or after-school clubs?  

Once you know the private school fee costs, not only can you get a savings strategy in place, but you can think sensibly about whether or not you can afford it.  

Although your child’s education might be your priority now, you don’t want to sacrifice your retirement savings and ability to make ends meet.  

How to save for private school fees

Unless you’re lucky enough to get a windfall, you’ll probably need to save and invest wisely to keep up with the rapidly rising cost of fees. 

Here are some options you can explore when saving for your child's tuition:

1.       Use a 529 plan

A 529 Savings Plan is a great way to save and even better if you start early.

The tax-free plan lets you put aside money regularly and invest it to help grow the tuition pot.  

The plan offers tax-free earnings growth and withdrawals, which could be used for private school tuition as they can be used to pay up to $10,000 in K-12 tuition.  

Many states offer tax deductions or credits when you fund this account, but it’s worth checking in advance. 

As a bonus, as of 2024, money from a 529 plan not used for education can be rolled into a Roth IRA without penalty – subject to certain conditions.   

2.       Use your investments

Unless you have a very high income and one increasing at the same pace as private school fees, you’re unlikely to have enough spare cash to pay for the fees unless you’ve made some investments.  

You could invest in bonds, which are generally seen as less risky than stocks.

Your money will be locked away for several years, but you could time it to get your cash and return it by the time your child starts private school.

It’s worth checking whether you’ll pay any tax on your investment returns, as this will eat into your income.  

3.       Use a custodial account

Custodial accounts save effectively for your child’s higher education, including college fees. 

A custodial account, such as a UGMA or UTMA, is a savings account that an adult controls for a minor. These savings accounts are available at brokerage firms, financial institutions, and mutual fund companies. 

Once the minor reaches the legal age of adulthood in their state, control of the account officially transfers from the custodian to the named beneficiary, at which point they claim full control and use of the funds. 

4.       Use any inheritance

One popular route is going through the grandparents, who may be happy to help or use their grandchild’s inheritance to support their education.   

They can give up to $17,000 a year (or $34,000 if they combine allowances) without incurring the gift tax, which ranges from 18% to 40%.   

If they make payments directly to an educational institution for someone else’s tuition, it is not subject to gift tax, regardless of the amount.  

Are private school fees tax deductible?  

You can’t use school fees to offset your tax bill unless your child attends a private school for special needs under federal law. 

Some states may offer a tax credit for parents who cover the cost of private school or deductions for private education expenses. It’s worth checking this in advance.  

Get expert financial advice

If you need help with any aspect of your financial planning, it's important to seek expert advice. A good place to start is Unbiased.

Here, you can get matched with an independent SEC-regulated financial advisor who can ensure you’re getting the most out of your current plan and are on course to achieving your financial goals.

If private school is on your wish list, a financial advisor can help you get a plan that works for your finances and other life plans. Unbiased can match you with your perfect financial professional.

Find your perfect financial professional today.   

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Senior Content Writer

Lisa-Marie Voneshen

Lisa-Marie Voneshen is a Senior Content Writer at Unbiased. She is an award-winning journalist with nearly a decade of experience writing and editing content across various areas, including personal finance and investing.

Need help with your finances?

A financial advisor can help you create a financial plan to reach your goals.