Education costs surge for every student, private and public

EDUCATION costs are rising at twice the pace of wages and inflation, hitting the hip pockets of families with kids at both public and private schools.

EDUCATION costs are rising at twice the pace of wages and inflation, and are likely to surprise most families — even those sending children to government schools.

An analysis of 10 years of cost data and thousands of education savings plan claims by Australian Unity Investments has provided a clearer picture of the true cost of school, and dispels the myth of free education.

The research found that public education costs an average $1700 in primary and $3500 in secondary school when out-of-school tuition and other charges are included. Add to that $1000 a year for extra-curricular activities, $1000 for technology, $800 for clothing and $400 for text books and even the youngest children cost households on average $5000 a year.

Technology for students is now another substantial cost to families. Picture: iStock

Australian Unity Investments general manager of life and super Matt Walsh said there was “unrelenting pressure” on education costs, which Bureau of Statistics data showed had climbed 130 per cent since 2000, compared with 70 per cent growth in wages and a 50 per cent rise in overall inflation.

“People are claiming a higher level of fees for public school than what you would consider is free education,” he said.

“Instead of private schools, some parents are sending children to public schools and paying for tuition.”

These extra tuition expenses, along with rising technology costs and larger and more diverse curriculums, were pushing school costs higher quickly, Mr Walsh said.

“Schools tend to be higher tech than some businesses, because they can’t afford to leave old systems in place,” he said.

“Fee schedules are only part of the cost — they don’t show you other levies and charges. And governments are doing less.”

Extra tuition expenses as well as extra curricular activities are also adding to the rising costs. Picture: Supplied

Catapult Wealth financial planner John Lawler said education costs were often a topic of conversation with his clients. “As parents, I think we go in with our eyes shut,” he said.

For many households, education spending started at six months rather than six years because childcare costs were more expensive than private school fees, Mr Lawler said.

He said private schools often included extras such as school camps in their annual fees but “with public school, if you want to participate, you have to pay”.

Many of today’s technology costs did not exist years ago. “It used to be get your pens and books — these days it’s get your laptop and your iPad,” Mr Lawler said.

He said parents should be realistic about their education spending plans. “There’s no point derailing your long-term financial future and your ability to help your kids out later in life.”

John and Sally Kernahan are starting an education savings plan as they put their three children aged 10, seven and six through primary school.

“We are aware that we need to be fully prepared for what comes when they go to secondary school, whether that’s in the public or the private system,” Mr Kernahan said.

Sally and John Kernahan with children Charlotte, 10, Ruby, 6 and Joe, 7, at their home. Picture: Sam Wundke

He said school sports such as football, tennis, netball and basketball were the main extra-curricular costs for his children.

“It all adds up after a while, and if you are not planning for it you certainly feel the pinch when it comes to paying the bills.”

Australian Unity’s analysis of its Lifeplan Education Fund claims data found that while primary school tuition costs an average $1700 for government schools, it is $6300 a year in Catholic schools and $12,500 in private schools.

For secondary schools, the average cost is $3500 for government, $10,700 for Catholic and $19,100 for private.

Mr Walsh said he expected education costs to continue rising faster than inflation.

He said about 15 per cent of the fund’s clients were grandparents. “It’s a far more meaningful decision than gifting the grandchildren $10,000 for example, which will probably be wasted on general consumption.”