Elite Private School Tution: Income Needed for 2 kids (Dallas, Plano: credit, daycare)
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Always lots of talk regarding the elite private schools (i.e. St. Marks, Hockaday, Greenhill, ESD, ect...) on this forum. These are unquestionably great schools but they're very expensive. Tuition runs around $25k-$30k per kid, and from what I've read, anyone making six figures and above does not receive much or any financial aid.
So for 2 kids, tuition runs $50-60k per year. Since tuition is not tax deductible, it would take nearly $80-90k of pre-tax income assuming a 35% tax rate, just to pay for tuition. Over 13 years, one would pay at least $325k per kid, assuming no tuition increases. With tuition increasing higher than inflation and the time value of money, it will ultimately cost well over $1M to send 2 kids to private school.
My question is how much income does it take to afford this? The only people I know who send their kids to these schools are likely grossing around 7 figures or have several times that in the bank already, but that's not really a representative sample to draw conclusions upon. Other than those students receiving financial aid, are all parents either making $400-$500k+, independently wealthy, or just flat broke? Even at an income of $500k/yr, two kids in private school is a significant percentage of income.
I would bet that there are lots of people with household income in the 200-300k range who are making it work by keeping housing and car expenses down. This can be done without living in places that are completely undesirable. But obviously if you want to live in a pricey place in Preston Hollow and send your two kids to private school, you will need lots of income to do so and your tuition checks will be a large line item.
Always lots of talk regarding the elite private schools (i.e. St. Marks, Hockaday, Greenhill, ESD, ect...) on this forum. These are unquestionably great schools but they're very expensive. Tuition runs around $25k-$30k per kid, and from what I've read, anyone making six figures and above does not receive much or any financial aid.
So for 2 kids, tuition runs $50-60k per year. Since tuition is not tax deductible, it would take nearly $80-90k of pre-tax income assuming a 35% tax rate, just to pay for tuition. Over 13 years, one would pay at least $325k per kid, assuming no tuition increases. With tuition increasing higher than inflation and the time value of money, it will ultimately cost well over $1M to send 2 kids to private school.
My question is how much income does it take to afford this? The only people I know who send their kids to these schools are likely grossing around 7 figures or have several times that in the bank already, but that's not really a representative sample to draw conclusions upon. Other than those students receiving financial aid, are all parents either making $400-$500k+, independently wealthy, or just flat broke? Even at an income of $500k/yr, two kids in private school is a significant percentage of income.
Just curious how people are making this work.
Why would you assume a 35% tax rate? Income tax rates are marginal so even at $500,000 of income your tax rate is ~29% (at the married rate).
Edit: Besides the math thing we make much less than $500k and could afford to send two kids at the numbers you used even maxing out 3 retirement accounts and paying back student loans (if those were gone we'd clear it easily). It just depends on what you spend your money on I guess.
I would bet that there are lots of people with household income in the 200-300k range who are making it work by keeping housing and car expenses down. This can be done without living in places that are completely undesirable. But obviously if you want to live in a pricey place in Preston Hollow and send your two kids to private school, you will need lots of income to do so and your tuition checks will be a large line item.
We spend about $25K on daycare for two kids , and our income is no where near $500K. So I agree, a family with HH income of $200K - $300K should definitely be able to afford that kind of private school tuition, assuming they live modestly.
Always lots of talk regarding the elite private schools (i.e. St. Marks, Hockaday, Greenhill, ESD, ect...) on this forum. These are unquestionably great schools but they're very expensive. Tuition runs around $25k-$30k per kid, and from what I've read, anyone making six figures and above does not receive much or any financial aid.
So for 2 kids, tuition runs $50-60k per year. Since tuition is not tax deductible, it would take nearly $80-90k of pre-tax income assuming a 35% tax rate, just to pay for tuition. Over 13 years, one would pay at least $325k per kid, assuming no tuition increases. With tuition increasing higher than inflation and the time value of money, it will ultimately cost well over $1M to send 2 kids to private school.
My question is how much income does it take to afford this? The only people I know who send their kids to these schools are likely grossing around 7 figures or have several times that in the bank already, but that's not really a representative sample to draw conclusions upon. Other than those students receiving financial aid, are all parents either making $400-$500k+, independently wealthy, or just flat broke? Even at an income of $500k/yr, two kids in private school is a significant percentage of income.
Just curious how people are making this work.
The average family with more than one kid enrolled in a pricey private is sacrificing in one way or another. You see a lot of school yard signs west of Midway in neighborhoods where homes have only recently broken the $400k and $500k price points. These are families who could have bought $1M+ homes if tuition weren't a factor and most of them bought houses in the $250-350k range. Our neighbors fit this description. They would not be living in our neighborhood if they had to buy in today. They both work but aren't doctors or attorneys, have two kids in expensive privates and are pretty frugal otherwise - their house hasn't been remodeled in probably 25 years, furniture is nothing special, no huge vacations, no expensive summer camps, they mostly eat and entertain at home - BUT they are extremely well educated and value education so they pay for it.
We intentionally did the same knowing that privates are in our future - we slashed our home budget in half to budget for future tuition payments. Yes, if you're a dual income professional family, $50-60k per year is a BIG chunk of change but if you're making $250-350k combined, you have enough to play with to make it work.
I think more people take out loans for private school than people realize, too, hoping that taking out $100k or whatever to subsidize grades 5-12 at St Marks will pay off with a big college scholarship.
The average family with more than one kid enrolled in a pricey private is sacrificing in one way or another. You see a lot of school yard signs west of Midway in neighborhoods where homes have only recently broken the $400k and $500k price points. These are families who could have bought $1M+ homes if tuition weren't a factor and most of them bought houses in the $250-350k range. Our neighbors fit this description. They would not be living in our neighborhood if they had to buy in today. They both work but aren't doctors or attorneys, have two kids in expensive privates and are pretty frugal otherwise - their house hasn't been remodeled in probably 25 years, furniture is nothing special, no huge vacations, no expensive summer camps, they mostly eat and entertain at home - BUT they are extremely well educated and value education so they pay for it.
We intentionally did the same knowing that privates are in our future - we slashed our home budget in half to budget for future tuition payments. Yes, if you're a dual income professional family, $50-60k per year is a BIG chunk of change but if you're making $250-350k combined, you have enough to play with to make it work.
I think more people take out loans for private school than people realize, too, hoping that taking out $100k or whatever to subsidize grades 5-12 at St Marks will pay off with a big college scholarship.
Is it that widespread to use loans? That is surprising to me. I mean, it's probably a better use of debt than a lot of the consumer credit sector (fixed rate loans for a vacation? Sure!). But that seems like a dangerous bet to make.
What is the value proposition for going private over buying in a suburb with a good school district like Plano or Frisco? I'm asking this honestly as someone who doesn't have kids yet; not someone who is trying to justify a choice they've already made. Houses in Plano and Frisco can be had for well under the $1MM plus it takes to get into the Park Cities. And while you could say that schools like St. Mark's, Hockaday, Greenhill, etc. are a cut above any public school offerings, how can you know before your kids are even school age if they'll even be accepted into schools like those? If you're forced to enroll them in that "next tier" of private schools, then does your argument that suburban public schools just aren't as good still hold water?
A couple of quick caveats: If your motivation for choosing a private school is based on a desire for religious instruction, "cultural fit", or greater odds of your kid making the football team then I respect that, but those likely won't be deciding factors for me, so I'm mainly looking for arguments based on academic merit and future opportunities for college and beyond.
What is the value proposition for going private over buying in a suburb with a good school district like Plano or Frisco? I'm asking this honestly as someone who doesn't have kids yet; not someone who is trying to justify a choice they've already made. Houses in Plano and Frisco can be had for well under the $1MM plus it takes to get into the Park Cities. And while you could say that schools like St. Mark's, Hockaday, Greenhill, etc. are a cut above any public school offerings, how can you know before your kids are even school age if they'll even be accepted into schools like those? If you're forced to enroll them in that "next tier" of private schools, then does your argument that suburban public schools just aren't as good still hold water?
A couple of quick caveats: If your motivation for choosing a private school is based on a desire for religious instruction, "cultural fit", or greater odds of your kid making the football team then I respect that, but those likely won't be deciding factors for me, so I'm mainly looking for arguments based on academic merit and future opportunities for college and beyond.
This post is probably going to ramble / FYI in advance.
I imagine many families are like ours. There is absolutely NO WAY we're ever moving to a suburb. We just aren't. So we had three choices when buying the home we expect to have kids in: HPISD, select DISD elementaries (given we can't live in East Dallas due to job locations) and then pray for magnets or admission for middle & high school, or privates. We got priced out of option 1, so it will be between option two and three. We won't be a "Hock/SM or bust" and will apply to every North Dallas private we deem to be a good fit for our kiddos when we have them.
If a family is truly open to Plano, Frisco, Southlake, Coppell, etc then I think you need a really compelling reason to apply to private school. A valid reason why the neighborhood schools won't be able to adequately educate your child. If we had bought in HPISD, private schools would never have been a consideration unless our kids had learning disabilities or some specialized need for private education. I have no actual stats on this, but I know a ton of Collin County families who use Dallas privates and every single one is enrolled in a Catholic school because the families are Catholic and prefer Catholic schools. I don't know anyone driving from Frisco to Hockaday though I'm sure there are a few out there.
What is the value proposition for going private over buying in a suburb with a good school district like Plano or Frisco? I'm asking this honestly as someone who doesn't have kids yet; not someone who is trying to justify a choice they've already made. Houses in Plano and Frisco can be had for well under the $1MM plus it takes to get into the Park Cities. And while you could say that schools like St. Mark's, Hockaday, Greenhill, etc. are a cut above any public school offerings, how can you know before your kids are even school age if they'll even be accepted into schools like those? If you're forced to enroll them in that "next tier" of private schools, then does your argument that suburban public schools just aren't as good still hold water?
A couple of quick caveats: If your motivation for choosing a private school is based on a desire for religious instruction, "cultural fit", or greater odds of your kid making the football team then I respect that, but those likely won't be deciding factors for me, so I'm mainly looking for arguments based on academic merit and future opportunities for college and beyond.
For us, it was job proximity and class size. It didn't make sense for us to move to Plano/Frisco for our jobs. It also isn't for everyone to go to a high school that graduates 1000+ kids per class.
I used to teach at a catholic school and an independent private school. I was also on the admissions committee. I think you'd be surprised how much financial aid is out there. Also, I don't know about dallas because I taught in NC but Catholics got a special rate that was equivalent to about 50-75% of the originally tuition depending on finiancial aid. Also, where I taught teachers' kids got a 50% reduction.
E.g., my niece attended a catholic school and got a 50% reduction in tuition via financial aid. Their family income was 100K with 4 total kids in the family. They basically paid $500 a month which is comparable to a car payment.
It is my experience about 25% are uber rich 50% are upper upper middle class and 25% are middle to upper middle class.
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, and our income is no where near $500K. So I agree, a family with HH income of $200K - $300K should definitely be able to afford that kind of private school tuition, assuming they live modestly.
