COLLEGE SAVINGS 101

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Should I pay for private elementary school or save for college?
http://www.savingforcollege.com/articles/should-i-pay-for-private-elementary-school-or-save-for-college-804

Posted: 2015-07-14

by Kathryn Flynn

The final year of preschool is bittersweet for most parents. In the last two years, you've gotten used to the idea of your little baby growing up and becoming more independent. Hours were spent deciding what type of preschool was best for your child. Should they go part-time or full-time? Are there benefits of attending a religious school? Is Montessori really best? Do they need to be fully potty-trained before the first day? And once you've made your decision, it won't be long until you'll be faced with an even bigger one - deciding on an elementary school.

The next nine years are crucial to your child's intellectual, physical and social development. The skills learned at their first "big kid" school will prepare them for success in high school and eventually college. So, how do you choose the best K-8 environment for your child? Well, the first thing you'll need to decide is whether you want to send them to a public or private school. On paper, the benefits of private schools typically outweigh what a public school can offer - but like everything else, it comes with a price. While public school are funded through state and local governments, private schools are funded by tuition from parents and alumni donations.

According to Private School Review, the average private elementary school tuition in 2014-15 was $10,065 per year. Catholic schools, which have the highest enrollment, will run you much less at around $5,330 according to the National Center for Education Statistics. But if you're like most young families, it's not easy finding an extra $500 a month. In fact, if you want to send your four-year old to a private college and you haven't started saving yet, you'll need to start putting away $1,048 each month to cover the projected $340,000 total cost. That leaves parents with a difficult choice to make - is it more important to pay for education now, or save for college?

There is no right or wrong answer, and each family will have to decide which path is best for them. But here are some things to think about if you're faced with this dilemma.

RELATED: How new parents can start saving for college

What are the real reasons you're considering a private school?

In some cases, a private elementary school can provide a better academic education, but not always. Yet there are still families who live in top-notch school districts who choose private education. While faith tends to be one of the most common reasons to send a child to a private school, there are also other qualities that parents think are worth paying for.

Deborah Sweeney, CEO of MyCorporation, and her husband decided to send their two sons to their neighborhood public school for elementary school because of it had been designated a "blue ribbon" school by the U.S. Department of Education and they were pleased with the community involvement. However, once their boys reached middle school, the Sweeneys were concerned about not being a large enough part of the school atmosphere, so they switched to a private institution.

"When it comes to deciding public over private, intangible costs need to be considered." Sweeney says. "For us, our sons' opportunities at a private school succeeded the costs."

School choice was also a difficult one for Bill Fish, Founder and President of reputationmanagement.com, and his wife. While they were both happy with the education they received from public elementary and public high school, they chose to send their two sons to a private elementary school.

"We have met a bunch of great parents through the school and there is a community aspect that I'm not sure you would experience with a public school." says Fish. However, they're leaning toward switching to public for middle school because of concerns about the small number of student per grade at their current school.

RELATED: 9 tips on getting into an Ivy League school

Which type of school will best suit your child's needs?

Private schools tend to offer a more advanced curriculum than public schools, which is why some parents feel they are a better fit for high achievers. But this can also be true for other types of students. Dr. Chester Goad, co-author of Tennessee's "Dyslexia is Real" bill, suggests that for some students with special needs, a private school might be worth the cost.

"A family with a student with dyslexia or some other learning difference may choose to send their child to a private K-12 school that specialized in reading disorders, and offers resources and support not available in public schools. If that's the case, the practical decision would be to finance private K-12 and offers foundation support for learning, rather than college." says Dr. Goad.

What effects can the school choice have on the child's future education?

To some parents, it's more important to focus on the primary years and building a child's foundation for education than it is to worry about paying for college. Crystal Stranger, EA, President of 1st Tax, sends her daughter to a private Montessori school because she believes that being exposed to strong educational values as a young child will help develop important lifetime learning habits.

"Nothing is wrong certainly with saving for college, but I want to make sure that my child wants to go to college in the first place, so that is where my priorities lie." says Stranger.

Families also understand that there are other ways available to pay for college, including grants, loans, part-time jobs and scholarships.

RELATED: How younger students can build a competitive profile for the Ivy League

But are you depending on scholarships?

Too many parents believe that if they send their child to a private elementary or high school they can expect to have a mailbox full of award letters when it's time to apply for college. But the truth is, you'll still likely end up paying much more in tuition than you'll receive in the form of a scholarship. Mark Kantrowitz, financial expert and publisher of Edvisors.com, points out that although private school graduates are typically awarded more scholarships, they are only 0.6% more likely to receive private scholarships and only 7.1% more likely to receive any type of merit-based aid, totaling just $1,900 and $1,400 per year per student, respectively.

Based on Kantrowitz's analysis of the 2011-12 National Postsecondary Student Aid Study (NPSAS), he also found that students who come from private schools are also more likely to enroll in a private non-profit college or a very or moderately selective college. These types of schools tend to be much more expensive than pubic colleges, so the net price ends up being about $4,300 higher per student per year- even with the merit aid taken into account.

Kantrowitz suggests that if you are planning to send a child to private school, to save for tuition with a Coverdell Education Savings Account.

"Coverdell education savings accounts provide parents with the flexibility to save for both private K-12 and for college" he says. "However, annual contribution limits are $2,000, much lower than for 529 college savings plans, and the fees may be higher."

RELATED: Coverdell ESA versus 529 plan

The final year of preschool is bittersweet for most parents. In the last two years, you've gotten used to the idea of your little baby growing up and becoming more independent. Hours were spent deciding what type of preschool was best for your child. Should they go part-time or full-time? Are there benefits of attending a religious school? Is Montessori really best? Do they need to be fully potty-trained before the first day? And once you've made your decision, it won't be long until you'll be faced with an even bigger one - deciding on an elementary school.

The next nine years are crucial to your child's intellectual, physical and social development. The skills learned at their first "big kid" school will prepare them for success in high school and eventually college. So, how do you choose the best K-8 environment for your child? Well, the first thing you'll need to decide is whether you want to send them to a public or private school. On paper, the benefits of private schools typically outweigh what a public school can offer - but like everything else, it comes with a price. While public school are funded through state and local governments, private schools are funded by tuition from parents and alumni donations.

According to Private School Review, the average private elementary school tuition in 2014-15 was $10,065 per year. Catholic schools, which have the highest enrollment, will run you much less at around $5,330 according to the National Center for Education Statistics. But if you're like most young families, it's not easy finding an extra $500 a month. In fact, if you want to send your four-year old to a private college and you haven't started saving yet, you'll need to start putting away $1,048 each month to cover the projected $340,000 total cost. That leaves parents with a difficult choice to make - is it more important to pay for education now, or save for college?

There is no right or wrong answer, and each family will have to decide which path is best for them. But here are some things to think about if you're faced with this dilemma.

RELATED: How new parents can start saving for college

What are the real reasons you're considering a private school?

In some cases, a private elementary school can provide a better academic education, but not always. Yet there are still families who live in top-notch school districts who choose private education. While faith tends to be one of the most common reasons to send a child to a private school, there are also other qualities that parents think are worth paying for.

Deborah Sweeney, CEO of MyCorporation, and her husband decided to send their two sons to their neighborhood public school for elementary school because of it had been designated a "blue ribbon" school by the U.S. Department of Education and they were pleased with the community involvement. However, once their boys reached middle school, the Sweeneys were concerned about not being a large enough part of the school atmosphere, so they switched to a private institution.

"When it comes to deciding public over private, intangible costs need to be considered." Sweeney says. "For us, our sons' opportunities at a private school succeeded the costs."

School choice was also a difficult one for Bill Fish, Founder and President of reputationmanagement.com, and his wife. While they were both happy with the education they received from public elementary and public high school, they chose to send their two sons to a private elementary school.

"We have met a bunch of great parents through the school and there is a community aspect that I'm not sure you would experience with a public school." says Fish. However, they're leaning toward switching to public for middle school because of concerns about the small number of student per grade at their current school.

RELATED: 9 tips on getting into an Ivy League school

Which type of school will best suit your child's needs?

Private schools tend to offer a more advanced curriculum than public schools, which is why some parents feel they are a better fit for high achievers. But this can also be true for other types of students. Dr. Chester Goad, co-author of Tennessee's "Dyslexia is Real" bill, suggests that for some students with special needs, a private school might be worth the cost.

"A family with a student with dyslexia or some other learning difference may choose to send their child to a private K-12 school that specialized in reading disorders, and offers resources and support not available in public schools. If that's the case, the practical decision would be to finance private K-12 and offers foundation support for learning, rather than college." says Dr. Goad.

What effects can the school choice have on the child's future education?

To some parents, it's more important to focus on the primary years and building a child's foundation for education than it is to worry about paying for college. Crystal Stranger, EA, President of 1st Tax, sends her daughter to a private Montessori school because she believes that being exposed to strong educational values as a young child will help develop important lifetime learning habits.

"Nothing is wrong certainly with saving for college, but I want to make sure that my child wants to go to college in the first place, so that is where my priorities lie." says Stranger.

Families also understand that there are other ways available to pay for college, including grants, loans, part-time jobs and scholarships.

RELATED: How younger students can build a competitive profile for the Ivy League

But are you depending on scholarships?

Too many parents believe that if they send their child to a private elementary or high school they can expect to have a mailbox full of award letters when it's time to apply for college. But the truth is, you'll still likely end up paying much more in tuition than you'll receive in the form of a scholarship. Mark Kantrowitz, financial expert and publisher of Edvisors.com, points out that although private school graduates are typically awarded more scholarships, they are only 0.6% more likely to receive private scholarships and only 7.1% more likely to receive any type of merit-based aid, totaling just $1,900 and $1,400 per year per student, respectively.

Based on Kantrowitz's analysis of the 2011-12 National Postsecondary Student Aid Study (NPSAS), he also found that students who come from private schools are also more likely to enroll in a private non-profit college or a very or moderately selective college. These types of schools tend to be much more expensive than pubic colleges, so the net price ends up being about $4,300 higher per student per year- even with the merit aid taken into account.

Kantrowitz suggests that if you are planning to send a child to private school, to save for tuition with a Coverdell Education Savings Account.

"Coverdell education savings accounts provide parents with the flexibility to save for both private K-12 and for college" he says. "However, annual contribution limits are $2,000, much lower than for 529 college savings plans, and the fees may be higher."

RELATED: Coverdell ESA versus 529 plan

 

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