By Dr. James M. Dahle, WCI Founder

This post was originally just a collection of random thoughts about private schools, a rant if you will. I was sure I would offend many of you who have your kids in private school. Instead of running just a big long rant, my assistant editor Jill said she wanted to turn it in to a Pro/Con post and she volunteered to write the Pro part. So my part will be the Con and hers will be the Pro. Just remember that I don't care what you do with your money as long as you can afford it. You want to blow it on travel, wakeboat gas, private school, or whatever, it's your choice so long as you can do it and still put 20% toward retirement. All right, here we go.


Cons of Private School – The White Coat Investor


Random Thought #1 – Private School Is a Big Rock

I often talk about the big rocks in your personal finances. This “big rock” phrase comes from the famous thought experiment where you try to fit a certain amount of rocks, gravel, and sand into a jar. If you start with the big rocks, everything fits in. If you start with the sand, there's no room for the gravel, much less the big rocks. The point is to pay attention to the big rocks first. This is in opposition to the Latte Factor as made famous by Bach, i.e. the idea that if you just stop buying lattes you'll be rich eventually. I would advocate that it is far easier to just pay attention to the big rocks and then you can have all the lattes you want. Since we all only have a limited amount of willpower to tell ourselves “no,” it is far better to use that limited willpower on the big rocks in our financial lives.

So what are the big rocks in your budget? Housing and transportation certainly qualify. So do vacations and state income taxes. But guess what else belongs in there? That's right, private school. I mean look at what it costs. In my area, it's about $10K per year per kid, and I'm told that is really cheap compared to places like the Bay Area and D.C. where it might be $30K per year per kid. But whether you have 6 kids in Utah or 2 kids in California, $60K a year in tuition is a huge rock. $60K a year invested at 5% real for 13 years is over a million dollars, $2.4M if you let it continue to compound for another 17 years at that rate. According to surveys of physicians in their 60s, about 57% have a net worth of less than $2 Million.

Shop carefully for the big rocks.


Random Thought #2 – Private School Affects Public Schools

Okay, here's where our bias comes in. Our kids are all in public schools. We went to public schools. We volunteer in public schools. My wife worked in public schools. Her mother worked in public schools. Her grandparents worked in public schools (and her grandfather was a superintendent). Nobody in my family has EVER gone to a private high school. We live in an area with excellent public schools. We are big supporters of public schools. In fact, with this most recent election, the only sign we had in our yard was a pro-school bond sign.

That said, one of the big beefs I have with private schools is their tendency to siphon off resources that could go toward the public school system. No matter what you believe, it is pretty hard to argue that public schools are not providing a societal good that benefits all of us. A better-educated citizenry improves the economy, society, and government for all of us.

When the children of the educated, wealthy, and/or moral are removed from public schools in order to get a “better” education, that leaves those in the public schools worse off. Kids learn not only from their teachers but also from their peers. That goes for scholastic and non-scholastic subjects. Private schools may also siphon off the most talented and dedicated teachers, although I suppose I have no data to support that. Parents that are likely to put their kids in private schools are also those most likely to be very supportive of the school—i.e., volunteer time, donate extra money, ensure their kids are on top of their school work and behavior, etc. Removing those kids and their parents from the public school system decreases the societal benefit of the public school system for all of us. Don't get me wrong, private school attending families are paying the same property taxes as everyone else, but there's a lot more to support than just paying your taxes.


Random Thought #3 – Financially, It's Usually Better to Move 

I get this question a lot. A family feels like they live in an area where the public schools are lousy and they are trying to decide whether to move to a more expensive area and put their kids in public schools or stay where they're at and pay for private school tuition. The right answer is usually to move, whether it is just down the street or to another state. The reason boils down to basic math.

When you pay private school tuition, that money is gone. When you buy a more expensive house, the value of the house is likely to keep up with inflation and then come back to you eventually. Plus, the cost of the house is a one-time expense rather than a recurring one.

Consider this scenario: You can live in a $400K house with crummy schools and pay $40K a year in private school tuition or you can live in an $800K house with great public schools. Over the course of 13 years, you will have paid $40K * 13 = $520,000 in tuition. That money is just gone. If you had spent the extra $400K, and the house appreciated at 3%, you'd be $187K ahead, instead of $520K behind, a difference of $700K. Now, you have to reduce that by the additional property taxes. Perhaps that's $5K–$10K a year. And most people aren't paying cash for their house, so there would be some additional interest costs and maybe some additional maintenance costs. Perhaps $10K–$20K a year. And the realtor fees would be higher. But the fact remains that all that added up isn't going to come close to $700K. You've got to really love your job and the area you live to give up an extra $700K for it.


Random Thought #4 – Benefits Are Typically Oversold

We know lots of people who put their kids in private school for various reasons. I haven't been particularly impressed that their kids are smarter or more well-rounded or more likely to succeed or more moral than those attending good public schools. Nor have I seen any data that supports that contention. You may feel differently, of course, but it seems to me that a great deal of the “private school benefit” is a status symbol. I also think a lot of people hear that the public schools are “bad” but never actually get involved or really investigate whether that is really true. I mean, sure, if your public schools really are terrible or unsafe, then I can't blame you for using your discretionary income on a luxury like private school. But at least go find out if they really are terrible—don't just take your neighbor's word for it.


Random Thought #5 – Cost Matters, Even with Education

On a related note, I am amazed how our cost blinders go on as soon as we start talking about education. I usually discuss this with regards to a college education, but it applies just as much to a grade or high school education. The value proposition is particularly acute when the alternative is completely free (at least of an additional cost beyond the required property taxes).

Go down the US News and World Report college rank list some time. You'll see colleges that are ranked the same for their academic merits but have 4–8 times the cost of tuition. Your children need significant guidance to make a wise college choice. They shouldn't be choosing a college because they think the buildings are pretty or their friend from high school is going there. It's a value proposition. What is the price and how good is the education. Sure, the education might be a little better at one college than another, but it likely isn't 8 times as good.

The same rules apply to grade school and high school. Just because the class size might be 20% smaller doesn't mean the education is 20% better. How much is it worth to have your kids learn geometry from someone who shares your religion? Is a 20 point higher average SAT really worth $100K in tuition? Those are the questions to ask yourself. It isn't just about “what's better.” It's also a value proposition.

I mean, don't you think it's amazing to see parents paying private school tuition for their kids when they haven't even finished paying for their own education yet? What message are you sending to your kids with that sort of behavior? That living your whole life in debt is normal? Is that really your intent?

We need to get out of this mindset that “I'd do anything for my kids” when “anything” includes stuff that makes no financial sense at all. Why don't you give them a choice? They can either attend private schools or you can give them $700K in today's money when they turn 40. The right answer for most kids is going to be “take the money.”

Now you have to know your kids too; some kids need services and experiences only available from a private institution. And we all have discretionary income we can spend any way we like. So if you want to spend your money on private schools, knock yourself out. But do your finances a favor and at least consider the financial implications of your choice before making it.


By Jill Gygi, Former WCI Assistant Editor

If Excellent Education Is a Priority, Make the Necessary Sacrifices

Over the past 20 years we’ve tried it all! We’ve homeschooled our kids, had them in private school, neighborhood public schools as well as charter schools, all in an effort to provide them the best education for their different needs. Jim and I are neighbors and we live in one of the top school districts in the State of Utah, but still, the schools have often come up short and I have felt compelled at times to seek better educational opportunities for my children.

If Jim had just left this post about private school being a big rock and that you should be very careful about choosing that big rock, I would have edited the post, published it, and left it at that! But, after reading his other thoughts on education I felt that I really needed to address his five main points.


is private school worth it

First day of Kindergarten for Jill's youngest.

Pros of Private School – Jill


#1 Private School Is a Big Rock

I couldn’t agree more. The years we had one of our kids in private school, we were keenly aware of the big rock that it was, and we made significant cuts in other areas of our budget to allow it to make sense financially.

My husband and I chose private school for a time because our local public school couldn't meet our daughter's needs. She was reading and doing math well above her grade level. Public schools, no matter how good they are, have limited options for teaching a child that doesn't conform. The best they could offer my daughter was to give her extra worksheets for home. They expected her to play along nicely sounding out P-A-T even though she was reading Chronicles of Narnia at home. They also expected her to be patient as others learned to identify numbers while she was experimenting with multiplication at home. How could I sentence her to an education far less than her capabilities? To do so would be a waste of her mind.

When we didn't have the income to justify private school, I homeschooled two of my boys for about four years. Now, THAT was a sacrifice and a labor of love. A teacher at our top-rated elementary school told me that my son was so different from the rest of the class that she didn’t have a way to teach him effectively. What is a parent to do in that kind of situation? Well, I wasn't just going to leave him there with little being taught. I bought a curriculum for a few hundred dollars that met his needs and I taught him myself! Every bit of sacrifice of my time and money was worth seeing my kids work to rise to their potential.


#2 Private Schools Affect Public Schools

I know Jim is well-meaning in his defense of public schools but if a public school isn't giving a child the best learning opportunities, should that child be sacrificed to the “public good?” Just because Jim is biased toward government education doesn’t inherently make it the moral “good” or the right fit for every kid in America—rich or poor.

It's not that I'm against government-run schools. I believe they are a public good and the right fit for many situations. What I’m against is people resenting, compelling, shaming, or legislating against others who choose an alternative. Physicians don’t seem to like it when well-meaning people say that they owe a debt to society for putting them through medical school. I don’t like it when people say that my debt to society is to sacrifice my children's education to systems that may not be working for a child.


#3 Financially, It Is Better to Move

Jim suggests that private schools “siphon off ” bright kids and families that are needed in the public schools and that those families basically have a moral responsibility to stay in the government system. However, his next argument is that it is a smart financial decision to buy your way out of a crummy school by purchasing an expensive home in a great school district. Using his logic, wouldn't then those “great public schools” be themselves, “siphoning off” the brightest kids and families from the crummy public schools that need them most? Wouldn't the greatest moral good be to move INTO a poorly performing public school? Of course not! That would be absurd.

Like Jim, I think moving into a great school district to better your children's educational situation is a perfectly viable option for a family. Likewise, opting out of the government system is just as viable an option and no less moral of a decision.


#4 Benefits Are Typically Oversold

Jim hasn't been overly impressed with kids who've attended private schools. My experiences have been different. We've found the benefits of our educational choices to be outstanding. At the private school our daughter attended, she was taught a rigorous curriculum. She, along with every student, was assigned to breakout learning groups that matched her academic level. Students were taught how to think on their own, to question assumptions, and to take individual responsibility.

At the charter school my daughter currently attends, the children are the most polite I’ve ever been around. They open doors for parents and each other; they say, “Yes ma'am,” or “No, sir”; they are exceptionally kind to each other. They act like this because it's part of the curriculum and expected. They are challenged each day in small learning groups that are ability-based allowing each student to learn at the level that best suits them. Expectations are high. I believe these kids act in a way that is noticeably different.

My daughter won a lottery position to attend this charter school and we were able to transfer her from the private school. Hey, I'm not stupid; there's no reason to keep paying for private school when the charter accomplishes my main goals. If you aren't seeing a significant difference between private school education and what you can find at the public schools, then absolutely stop wasting your money.


#5 Cost Matters

Some of you are parents or grandparents that have “Enough” or “Beyond Enough.” If that is the case, why not look at private schooling if it could give the children you care about “more.” If you aren't in that position of Enough yet, but feel the acute need that your child needs “more,” then you still have options! You can move into a better performing school district, find special programs within the public schools that can better meet your kid's needs, you can homeschool, find a charter school, or sacrifice like crazy to afford a great private school. All are viable options for helping a child reach their potential—all without feeling any guilt (as long as you save that 20% for retirement!).

What do you think? What does private high school in your area cost? What financial sacrifices have you made to put your kids in private school? Do you think it's worth the cost? Why or why not? Have you considered moving to a better school district? Do you think families have a moral obligation to keep their children in the public schools? Comment below!

Are/were your K-12 children enrolled in private or public schools?

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[This updated post was originally published in 2018.]