Australian parents want lots of things for their children; they have big dreams for them which include a happy life, a solid education and a fulfilling job with lots of opportunities. But what does all of this cost?
The average amount spent on education for an Australian family with two children varies based on the family income. On average a low-income family will spend approximately $22,076; a middle-income family will spend $44,644 whereas a high-income family will spend $191,608. The cost of bringing up two children for a typical middle-income family rose to $812,000, up from $537,000 in 2007; a rise of 50% since 2007 but the household incomes over that same period only grew 25%.
Parents are spending more
on their children than ever before
Based on a report by The National Centre for Social and Economic Modelling, Australian parents spend on average a total of $50,000 on their education and childcare. According to The Australian Scholarships Group, a not-for-profit provider of education savings plans, the total cost of putting a child through a government primary and secondary school can be as much as $65,829. That cost includes tuition fees and levies (including fundraising contributions), uniforms, school bags, music and sporting materials, computer costs as well as incidentals like private tuition, camps and extra curricular activities. ASG estimates that the private education figure can be as much as $428,723 per child.
The Australian Scholarships Group forecasts the cost of private schooling in Sydney to be $541,275, making it the most expensive city in Australia to educate a child. The breakdown is $175,109 for primary school and $359,043 for high school.
Is your child’s education really worth
half a million dollars?!?!
Education costs are on the rise. The cost of education in Australia has almost doubled the rate of inflation over the last 20 years. According to 2009 figures from the Australian Bureau of Statistics, education costs rose at 5.6 percent compared to the overall inflation rate of 1.3 percent. There are a number of reasons for this including rising teacher salaries as well as technology, infrastructure and maintenance costs.
Couples with an eldest child aged 5-14 years in 2009-10 spent at least double what their 1984 counterparts spent on housing costs, miscellaneous goods and services (which includes education fees), and household services and operation (which includes net child care costs). Their weekly disposable income had increased by 77% ($820) to $1,891 in 2009-10.
The average tuition for senior students at Catholic schools in the Sydney diocese is about $2,200. Public school cost in Sydney is about $71,000 and parents could spend up to $234,877 for their child to attend systemic Catholic schools. In 2011/12, NSW spent $14,123 per full-time primary student in the classroom and $16,749 per full-time secondary student.
In higher education, expenditure per student over the last decade has been relatively stable, while spending per student in government secondary and primary schools has increased 20 per cent and 30 per cent respectively. Meanwhile expenditure per hour of training in VET actually decreased around 25 per cent over the same period. Over the period 2012 – 2013 total expenditure grew only 15 per cent for VET, while schools and higher education experienced growth of 23 and 40 per cent respectively over the same period.
To a certain extent the costs to parents of sending their children to university are reduced by the Higher Education Contribution Scheme (HECS). While there are substantial costs associated with attending university other than fees (for example text books, travel and possibly accommodation fees and the income foregone while participating in full-time study), HECS allows students to defer payment of their fees until after they graduate and begin to earn an income over $49,096 (ATO, 2012). So although many parents will incur substantial costs supporting their children who are studying, those who are not able to help with their children’s fees up-front, part of the cost will eventually be paid by the children after they have graduated and have joined the labour force.
Australian Scholarships Group, a not-for-profit provider of education savings plans, estimates that the total cost of putting a child through a government primary and secondary school to be about $65,829. This figure includes tuition fees and levies (including fundraising contributions), uniforms, school bags, music and sporting materials, computer costs as well as incidentals like private tuition, camps and extra curricular activities. For private education, ASG estimates the figure to be up to $428,723 per child.
It is a fact that Education is one of life’s major investments – in some instances it is probably a bigger investment than a family home. By saving regularly, parents are more likely to achieve the goals and aspirations they have for their children. It is never too late to start saving; obviously the sooner the better.
There are a few specific education funds set up that can help you put money aside for your child’s education. These are called scholarship funds and are offered by the below friendly societies:
Don’t get me wrong, I am a HUGE proponent of education in all its forms, however like any investment – the Return On Investment (ROI) has to be worth it. I hear horror stories in the United States where people are graduating from University with $250,000 of student loan debt with degrees that are commercially worthless – which begs the question — what were they thinking?!?!
They weren’t thinking… They “thought” a degree was a must-have… It might be, but not just “any” degree and not at “any cost”…
Junior is probably not the next Einstein
Simply put – most students are not worth the investment parents are making. Many parents over-compensate falsely thinking it’s worth the investment when it clearly is not. I am sure it’s a tough realisation when the moment comes that “junior” is not the next Einstein. Throwing money at the problem has never proven to improve IQ…
Sorry for calling it like it is. Someone has to, otherwise keep spending as you are and hope for a miracle!