How much you could earn by not sending your kids to private school

Undecided about whether to send your children to a private school? We’ve done the maths for you and found out just how much you could earn if you invested that money elsewhere. SEE THE DATA

Queensland parents could earn more than enough to give their kids a deposit for a unit if they invested the money they would have otherwise spent on sending their kids to private schools, new analysis has revealed.

Market comparison site Finder last month revealed disturbing data that showed today’s average school leaver would have to save for 21 years to be able to afford a deposit for a house.

Now, as the state battle simultaneous cost-of-living and housing crisis, it has crunched the numbers for The Courier-Mail to examine how far private school fees could go if that money was instead invested.

Finder looked at tuition fees from the top four most expensive Queensland schools – Brisbane Grammar School, Brisbane Boys College, Churchie and Brisbane Girls Grammar – and three mid-range private schools – Padua College, Villanova College and Clairvaux MacKillop College.

The average annual tuition cost for Year 7 at the most expensive schools was $30,357, while the middle range schools were $10,424 – an annual difference of $19,933.

They took that annual difference and forecast what would happen if that money was invested in a savings account at 3.63 per cent interest per annum, a three-year term deposit, the S&P 500 stock exchange and the ASX 200 stock exchange.

The research found over the span of their high school years, Queenslanders have the potential to earn more than $130,814 in savings, $131,167 in a term deposit, and between $149,866 to $158,433 in various share markets – potentially enough to earn them the $123,913 deposit needed to buy the average-priced unit.

Finder head of consumer research Graham Cooke said the research highlighted the power of compound interest.

“Even a seemingly small difference in annual cost, when invested over several years, can snowball into a significant sum,” he said.

“The windfall generated from investing could benefit your retirement, your ability to purchase a house, or having a financial safety net to fall back on,” he said.

David Gillespie, author of Free Schools said opting for private education doesn’t necessarily mean bang for your buck.

“You can choose how much you want to pay, but that doesn’t guarantee you a different result to the people who pay nothing or to the people who pay less,” he said.

“When you filter out the data and match the demographics – so for example, match the students at Brisbane State High with the students at Grammar and have identical demographic matches, which is possible with those two schools – you find that smart kids who go to state schools do just as well as smart kids who go to private schools.”

Griffith University econometrician associate professor Nick Rohde said Brisbane had a number of top state high schools which might be a better option for some people.

“There’s the cost of living crisis and the housing crisis as well, and these don’t look as if they’re going to go away overnight,” he said.

“For some people, not for everyone, but for some people, they might want to invest in some sort of managed fund.

“You could put this towards university education, or you could put this towards a trade school, or you could push put this towards investing in a house.

“There are many good ways to invest money.”