personal finance

How to get a discount on a private school education


Here is a paradox — the cost of sending a child to an independent school has soared far above the rate of inflation, yet the number of UK pupils in private education has never been higher. How is this possible?

The answer is that more than £1bn a year of financial assistance is available to parents, enabling one in three students to have their school fees reduced or even waived.

While it may not be openly discussed at the school gates, how to pay the school fees has become a big problem for more middle-class households. A private education is nearly 50 per cent more expensive than a decade ago, according to data from the Independent Schools Council (ISC).

Average fees for day pupils are now nearly £4,800 per term, or just over £14,000 a year according to the ISC. Costs are particularly high in the Southeast and London, where boarding school fees now average more than £13,000 a term — close to £40,000 per year.

Scholarships and bursaries are a key factor in affordability — although many parents may be unaware how much help is available.

At some schools, parents who apply for means-tested support could qualify even if they have a household income of £90,000. And as schools compete for the brightest children, an increasing amount of assistance is being provided on a “needs blind” basis to pupils with a flair for particular subjects, such as music and sports.

However, parents need to do their homework — the application criteria are different for every school, and the rules are strict — the level of financial disclosure required to obtain means-tested funding is high.

Schools typically turn down assistance requests from parents who own second homes or palatial properties. If they feel parents could afford to pay the fees by downsizing their home, or asking grandparents for help, they will not be afraid to say so.

Learning curve

Growing pressure on independent schools to justify their charitable status has encouraged greater generosity in the form of scholarships and means-tested bursaries.

The ISC says that £800m of the £1bn provided in “fee assistance” last year came directly from the schools themselves. Although it does not cover every private school in the country, industry professionals highly rate its research.

Just over 175,000 ISC students currently benefit from some form of fee reduction, around half of these through means testing. The number of those receiving “free” places — where all fees are paid — is now more than 6,000 pupils, an increase of 5 per cent year-on-year.

Parents of children who win a scholarship can often also apply for a bursary — often referred to as an “assisted place”. In addition to help with school fees, further payments could be granted towards the cost of uniforms, laptops, trips and other travel costs.

The vast majority of this kind of financial assistance is directed at UK families, but many parents do not know how to access the increased funding.

“Believe it or not, it’s quite a challenge for independent schools to get applications from the families for whom their bursaries are intended — gifted children from low-income families,” says Catherine Stoker, managing director of Independent Education Consultants, which advises parents on choosing the right school.

“Scholarships and bursaries are certainly one of the most ‘searched for’ items on our website,” she says. “Parents often call us for advice on how to secure bursaries — it’s a confusing area. Parents who would be eligible often lack the confidence to call their local independent school and inquire about how to apply. Sometimes they don’t know bursaries exist.”

A graphic with no description

She advises independent schools to engage in some “local PR” to make parents aware that they are keen to hear from them.

Many will be surprised to learn what counts as a low income. As a rule of thumb, schools will seek to ascertain the “relevant income” — the gross household income less an amount of between £2,000 and £3,000 per dependent child. Having relevant income of £20,000 or less would usually qualify for full fees to be paid, but some schools will provide funding on a sliding scale of up to £90,000.

Some will feel uncomfortable about the children of relatively well-off middle class families being considered deserving of charity. The headmaster of Stowe School has said that middle-class families who could have afforded to pay for private education a generation ago were now being “squeezed out because of affordability”.

Assisted places are usually awarded for a set period when a pupil joins a school, typically at the age of 11, although many schools offer specific bursaries to sixth-form entrants.

Last year, £420m was provided in means-tested, as opposed to merit-based, fee assistance for pupils at ISC schools; an increase of nearly £160m since 2011.

Ms Stoker says that if parents apply early enough to the annual bursary fund, the school will try to do all it can to offer a place: “Rejection tends to be more as a result of not meeting the criteria, rather than there not being a place.”

“Schools also offer help with fees to the ‘squeezed middle’ because having a broad social mix that reflects our society is incredibly important,” says Julie Robinson, chief executive of the ISC.

Special bursaries are often available for pupils whose parents are in the armed forces, Church of England clergy, or who work for independent schools. There can also be favourable terms for second and subsequent siblings attending a school.

Prepare to be tested

Parents who want to apply for the increasing amount of financial help available need to do their homework, researching the websites of the schools they favour and applying early.

The means-testing process varies hugely. Many independent schools publish a calculator on their websites to indicate what bursary help might be available for children passing their entrance exams. Others treat each application on a case-by-case basis.

There are usually two parts to the application process. The initial assessment will look at a brief summary of a family’s financial circumstances; the second stage will involve credit checks and more detailed supporting evidence.

The bursars of independent schools work to ensure financial help with fees goes to families who otherwise could not afford the full cost.

Parents should be prepared to provide 12 months of bank statements for all of their accounts, including savings and other investments such as Isas, plus evidence of income through P60s, payslips and company accounts. Mortgage or rent statements will also be needed.

Divorced parents are usually both required to produce their own financial information; schools usually prefer a joint application, but it can be two separate applications with the information kept confidential.

Schools may also set formal limits on the value of a family’s gross assets — for example, King Edward’s School in Birmingham currently has an upper limit for total parental relevant income of £72,000 but also has an upper limit for gross assets of £500,000.

King Edward’s School said: “The school has a duty to ensure that its limited charitable resources are directed towards the most deserving cases. For this reason an assisted place is not intended to support families that, with reasonable financial and personal sacrifices, could have otherwise afforded paying the full fee.”

A graphic with no description

Parents who have proven ability to borrow or who have “wider family members” who could contribute to fees would not normally be considered eligible for help; nor would families who take frequent or expensive holidays, own new or luxury cars, have invested in significant home improvements or own a second property, said the school.

Latymer Upper School in west London takes a different approach; it does not set strict thresholds and criteria but looks at everyone as an individual, and seeks “to make plenty of awards at all levels.”

For example, a single parent with a low-income job might get a 100 per cent bursary while a family with three children, both parents working with moderate to high income but a significant mortgage might receive a 25 per cent bursary.

In the current academic year, Latymer has offered scholarships and bursaries to just under 200 students at a cost of £2m. By its 400th anniversary in 2024, it wants to offer bursaries to 300 pupils.

Westminster School was founded in 1560 and got its royal charter from Elizabeth I for offering help to 40 poor scholars. It currently allocates £1.4m a year to bursaries and these can pay up to the full fees of £29,709 per year, plus uniform, equipment and other school expenditure.

Its website advises parents: “There are no exact financial criteria for bursaries but in judging a family’s needs, all income, essential expenditure, and all assets in savings, investments and property will be assessed. Where, for example, a home is considered to be too large, in an expensive area or where excess equity could be released, a family may be expected to downsize or remortgage as necessary to release funds. It is also expected that savings in shares, Isas, other investments and equity in second homes will be released. The school will then assess what level of bursary (between 10 per cent and 100 per cent of the fees) is needed.”

Where parents live can also give children access to financial help as some bursaries were set up to benefit specific communities. At Harrow School, pupils who have lived in London boroughs, including Barnet, Brent, Camden, City of London, Ealing or Hammersmith, for more than two years may be eligible for financial help from the John Lyons Foundation. Those from Lincolnshire, Nottinghamshire, Derbyshire and Leicestershire may be eligible for funding from the Sherwood Award.

Christ’s Hospital School in Sussex offers the Queen Victoria Scholarship to pupils from the Isle of Wight with academic potential who would benefit from an independent boarding school education. One of the leading charitable schools in the country, more than 80 per cent of its students come from state schools and receive discounts of up to 100 per cent on fees of £11,950 per term.

For richer, for poorer

In addition to bursaries and scholarships, financial help is usually available in the event of hardship caused by redundancy, illness or bereavement.

The Royal National Children’s Springboard Foundation, the largest boarding school bursary charity, pairs children from low-income homes with boarding schools.

The charity pays full bursaries in the event of parental death, sibling or parent disability or abuse. In 2017, it gave financial support to 465 pupils and aims to support 1,000 by 2023.

Bolton School currently has about 320 bursaries in place — assisting one in five of its senior school pupils — but keeps some funds in reserve to provide financial assistance over the short term to pupils — especially for those in critical exam years — where unexpected financial hardship hits.

“We always work with families who are thinking they may need to leave due to financial hardship, to try and ease their problem in some way,” says Cathy Fox, clerk and treasurer at the school.

Discounts on fees are not exclusively reserved for those on low incomes. Those who can afford to pay full fees can still unlock discounts by paying the full cost upfront.

Parents or grandparents who can afford to pay the total fees for the years the pupil will be at the school can make substantial savings.

Winchester allows the payment of the fees in a single lump sum up to five years in advance, and will apply a discount on the full fees. This method also means parents will avoid annual fee inflation. However, parents run the risk of losing their cash if their child needs to move to a different school.

Financial advisers say that grandparents are also aware of the inheritance tax benefits of paying school fees for their grandchildren.

If they live for at least a further seven years, any lump sum would be treated as a “potentially exempt transfer” and therefore not form part of their estate when they die.

Under current gifting rules, grandparents can each give £3,000 a year tax free, and can make unlimited gifts from income so long as they have sufficient to live on after the school fees are paid.

Even so, the days of having to find a large lump sum at the onset of each school term are over. The majority of schools now allow parents to spread the cost by opting for 10 monthly payments by direct debit.

A place at Eton for £750 per term

TR9D2T Eton College schoolboys rehearse the annual Procession of Boats ceremony on the River Thames.
© Alamy

Eton College charges annual boarding fees of more than £42,000, but more than one in five pupils receive some form of financial assistance.

The school, whose alumni includes countless prime ministers, Prince William and Prince Harry, is spending £6.5m this year to support 273 of its 1,300 pupils. The average bursary covers two-thirds of school fees.

“We are proud of our bursary and scholarship provision which last year saw 74 boys receiving 100 per cent fee remission and a further 208 boys receiving a range of financial assistance,” says the college.

Eton hopes to support one in four pupils in future, and is able to fund this from the school’s own resources and donations from its powerful network of alumni.

The son of a Windsor pharmacist won a scholarship to pay the full boarding fees for his eight years of education at Eton.

His father said: “Applying for the scholarship was very easy indeed. The information was readily available on Eton’s website.

“At the time, so long as your child was under 10 years of age and had not been to a fee-paying school, you just had to contact Eton and ask to come and sit the scholarship test.

“On the day, there were, I think, around 200 or so other children sitting it. It was a week or so before we were notified that they wanted him to come back again. At this follow-up day, there were around 6-10 children called back and they were involved in discussions rather than actual tests. Our son was offered a junior scholarship a few days later.”

The income of both parents was assessed and Eton covered all the school fees. “We supplied a detailed list of our income and expenses and Eton then set a contribution level.” The parents paid “a small contribution each term” of around £750 plus any expenses such as dinners, laundry, and society subscriptions.

“Our son got A star and A grades in everything, plus a clutch of school awards and went on to read English at Cambridge.”



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.