Why Are Tuition Costs Rising?

Published November 08, 2008
No doubt about it, private school tuition costs are rising. Some schools seem to be rising at a faster rate than others. Why? What's behind those tuition increases? Unfortunately for many private schools costs of basic goods and services have risen dramatically. Energy costs alone chew up a major part of any school's budget. Faculty and staff salaries and benefits are a substantial part of  budgets as well. In order to attract and retain qualified, skilled and experience personnel, you need to offer a decent compensation package with annual increases. Most schools also offer free or substantially reduced tuition for children of faculty and staff.


Let's look at a couple of schools' tax returns or Forms 990 and analyze a few lines of expense data which they reported to the IRS. The Foundation Center keeps Forms 990 for every non-profit organization which files with the IRS. Click the links to see how much the school reported as income and expenses as well as a wealth of other data.
 
Ravenscroft School, Raleigh, North Carolina
  2002 2005
Instructional 7,261,431 8,579,257
Utilities 388,919 473,036
Insurance 133,232 159,520
Cleaning Services 309,617
 281,143
Instructional 7,261,431 8,579,257
               
The Madeira School, McLean, Virginia
  2002 2005
Instructional 5,099,223  6,006,740
Telephone 
136,363 97,368
Printing & Publications 364,708 628,550
Supplies 624,291 980,491

Note that it is frankly impossible to compare apples to apples when it comes to private schools. Even their accounting and reporting varies from school to school. But a review of the data shown above paints the same picture: costs are rising.

Another fact to consider is that tuition charged by a school does not offset expenses. That is why you will see your tuition bill filled with additional charges for technology, communications, laundry, athletics, uniforms and so on. These sundries, as the more bespoke schools style them, vary from school to school.
 
Is it worth it? Private schools have to spend their income wisely. They have no public funding to bail them out if they get into financial trouble. They must provide a consistently high quality service or their clients, the parents, will withdraw their children. Consequently you will find that most schools, not all of them, mind you, but most private schools are efficiently run. They economize wherever they can. Many of them are making substantial investments in what they call sustainable education in which buildings and services are made as environmentally sensitive and friendly as they can be. Despite steady tuition increase private schools remain dollar for dollar one of your better values in today's market.

 

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Guidance on paying for a private school education.

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