In Challenging Times, is Private School an Expendable Luxury?

Posted by: Charles DuBow on September 16

There are many different kinds of luxury. While the recent implosion of Lehman and the fears flooding Wall Street will hurt sales of everything from Ferraris to Fendi handbags, one other sort of luxury purchase that has been overlooked is the impact on private education. To most people education isn’t a luxury but for those who choose to send their children to private schools it is.

After all, these schools cost thousands of dollars per year. For boarding schools such as Phillips Exeter Academy, the tuition alone is almost $38,000—and that’s after taxes. This is the sort of expense now that many people feeling the sting of the downturn in the financial sector in specific and the stock market in general may be forced to seriously reconsider. To be sure, many private schools offer financial aid and they will doubtless be called upon to provide this assistance by some families that had once paid full-freight. But it is also likely that many parents will find themselves pulling their children out entirely and placing them in what are quite often perfectly good public schools. This is not such a terrible thing and may actually be better in the long term for many of the children in question.

Nonetheless, for many families, this will be a difficult decision. It is never fun to shake up a child’s life and move them away from a familiar environment to one that is new and different. (Especially if Mom or Dad has lost their job and belts are being tightened across the board.) It may also be a challenging period for the schools themselves which prospered during the fat years when demand for applications often surpassed supply. They will now have to scramble to compete for qualified students whose parents can afford the tuition and struggle to provide financial aid to the rest without bleeding their endowments white.

Of course, it is hard to feel too sorry for private school kids or their parents. But for many a private education may soon be a luxury they will have to forego.