Not Just Kid Stuff - putting your child through private school - Industry Overview

Black Enterprise, Sept, 1999 by Joyce Jones

Putting your child through private school takes more than lunch money

JAMES AND PATTY BALLENTINE LIVE IN PRINCE George's County, Maryland, one of the nation's most affluent African American communities. They chose the area, in part, because they thought it would be a great place to bring up their two small children, William, age five, and daughter Kendal, one. The neighborhoods are comfortable and well groomed, and the playgrounds and backyards are filled with other children who will be raised with values and aspirations similar to the Ballentines'. There's just one problem. "I got to know the public school system very well," says James, who at the time the Ballentines moved in worked as chief of staff for U.S. Rep. Albert Wynn (D-Maryland). "And I couldn't bear to send my children there."

He's not alone. According to the National Association of Independent Schools (NAIS), 5.9 million, or approximately 11%, of the 52.2 million children educated in the United States are enrolled in private schools. A little over 17% of the 456,000 children enrolled in NAIS member schools are children of color. Their parents' reasons for sending them to private school may vary. A poor public school system, their own high academic standards or a desire for smaller classes that provide more individual attention are a few of the reasons parents opt for private school. But one thing they all have in common is this: each faces the financial dilemma of forking over an awful lot of money each year to educate children in preschool through grade 12.

And don't get James Ballentine started on college. When William was one, a financial advisor told James to pick two schools he would want his son to attend, each at opposite ends of the financial spectrum. He picked the University of Maryland, for which he would get an in-state tuition rate, and Georgetown, a prestigious private university in Washington, D.C. "If I wanted to send my child to Maryland," James was advised, "I would have to save $200 per month for 17 years. For Georgetown, I'd have to save $900 per month. If you could, imagine the fear in my eyes when he said $900 a month. Even at the rate I'm saving now, I won't be able to afford it."

Fear and panic are common among the parents of school-age children when they think of the daunting cost of private school. The bad news is that each year the cost of elementary-secondary education rises by nearly 7%, according to the NAIS. The good news, though, is that with proper planning--whether children attend private or public schools, at the elementary, secondary or university level--most parents can afford to send their offspring to college. And if, like many, you've waited until your child is in middle or high school to start thinking of tuition costs, it's still not too late.

KINDERGARTEN CASH

For two years, Deborah Frazier, a vice president and senior financial consultant at Merrill Lynch & Co., sent her son Zachary, five, to the Hitchcock Church Weekday School in Scarsdale, New York "I want to make sure my son receives the best education I can possibly provide," she says. While fees may vary, NAIS estimates that 1998-99 tuition for pre-K ranges from $4,990 to $16,400 in the East to $1,905 to $8,926 in the Southwest. For kindergarten, tuitions range from $6,120 to $14,700 in New England to $4,986 to $14,350 in the West.

Many companies and organizations allow employees to make pretax contributions to flexible spending accounts to pay for qualified dependent day care, such as preschool and private kindergarten. These contributions can be made from the time the child is born until he or she completes kindergarten, for a maximum of $5,000 annually. You determine how much money to contribute to the account, based on anticipated expenses during the plan year. Each pay period, a portion of that amount is credited to the flexible spending account out of your gross pay. Tax withholdings are then calculated on the remaining amount, so your tax rate is actually lowered. You can also withdraw money, tax-free, from the account whenever you need to make a tuition payment, and deductions can continue throughout the year. Be aware that you will probably have to submit proof that the withdrawal is being used for a qualifying educational expense.

"Flexible spending accounts are a good thing because it gives you tax advantages and it's a very efficient way to save," says Frazier. In September, when Zachary enters kindergarten at the Mohawk Country Home School--which will cost $10,000--Frazier will have satisfied half of that financial commitment "in a less painful way" through her flexible spending account. The rest will come from her savings and investments.

CHECK, PLEASE!

Frazier and the Ballentines are a few of the growing number of parents who are buying their children a better education. "It was tough thinking long term that if I stay in Prince George's County I'd continue to pay for school," laments James, who in two years will have a second tuition to pay when Kendal begins school. Although the school he has chosen, the Renaissance Christian Academy, has a flat-rate tuition for preschool through eighth grade, there are regular inflationary increases.