Getting higher education at a private school can break a family's budget, with the College Board reporting that the average cost for tuition, room, and board at a 4-year private college was just shy of $37,000 for the 2010 to 2011 school year. This cost does not even include other expenses, such as books, supplies, transportation to and from school, and a student's personal expenses while at school. Families should plan ahead to create workable budgets to afford private school education.
One of the best strategies for budgeting is to start saving well in advance of a student entering college. A family can put away money every month or use windfalls, such as tax refunds and holiday bonuses at work, to save for education. Putting money in a 529 college savings plan with the parent as the owner and the child as the beneficiary allows the investment to grow without tax and be treated as a parent asset, not a student one, when it comes time to apply for financial aid. Many websites offer calculators to help you determine how much you need to save each month or year to reach your target college savings by the time a student enters school.
Although private schools have large sticker prices, they often provide generous financial aid awards as well. Many prestigious private schools offer to meet all financial need for admitted students. This means that the expected family contribution determined by the federal formula is all that the family will have to pay. The college creates a financial aid package with federal and state grants and loans and institutional grants and scholarships from its endowment to meet a student's full need. If your family's income is around the national average or below, you should expect to get at least some financial aid from private schools.
While a student is in school, one way to help budget for the education is for the student to spend less than expected in the school's cost of attendance. For example, a student can purchase used textbooks and resell them at the end of each semester to spend just a fraction of the expected textbook cost. Other ideas include avoiding discretionary purchases, staying at school and working during spring break instead of spending money to travel home, or sharing an apartment, buying groceries and cooking instead of spending on the college's room and board plan. At home, the family can also cut expenses to free up more of the parents' income to pay for education.
The family does not have to pay for all of a private school education up front. Instead, the student can borrow with low-cost student loans and repay this debt after graduation. Although borrowing is not ideal, it is also not out of the question if a student really wants to attend a particular private school. In general, a student should aim to graduate with less debt than his expected starting salary. This will keep loan payments within a reasonable range. Use federal loan programs, such as Stafford, Perkins and PLUS Loans, before turning to more expensive and less flexible private student loans.