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Private School for your Child

Robert M. Witt, executive director,
Hawaii Association of Independent Schools

A Good Investment

Today’s parents understand the urgency surrounding their choice of a school that will prepare their child to live a purposeful and meaningful life in the knowledge-based economy of the 21st century.

Parents choosing one of Hawaii’s 124 private schools (including the Catholic elementary schools) understand that the best education is a values-added experience: one that provides a structured, nurturing environment, where young people learn not only reading, math and science, but also the importance of hard work, leadership, moral courage, social responsibility and good citizenship.

Hawaii’s private schools provide a choice to parents. Schools differ from one another because of their unique missions and philosophies. Some are selective in their admissions, enrolling students whose previous school records show a high level of academic success. Others accommodate children who show academic promise and potential. Still others offer programs for students who encounter challenges. Collectively, Hawaii’s private schools are a rich marketplace of programs and services, representing an invaluable investment for parents.

Speaking of education as an investment, private schools in Hawaii are accountable to their individual boards of trustees, to the parents who pay tuition, and to the entities that accredit them. These same schools are affordable and accessible, and they are committed to enrolling an ethnically diverse student body. Most families who invest in a private education do not have high incomes, and many receive some tuition assistance.

Graduates of Hawaii’s private schools do well in college in rigorous courses of study, express strong satisfaction with their careers, are confident in their ability to meet future training needs, are adept at lifelong learning, are skilled in the technology of the 21st-century workplace, pursue healthy, active adult lives, and place the highest value on community service and civic engagement.

Alan Kodama, CLU, CFS,
Alan Kodama & Associates

Big Financial Tradeoffs

The decision to send a child to private or public school has been a topic of debate throughout the 23 years that I have been a financial adviser helping clients with education planning.

With private-school tuition averaging $16,500 for grades K-12, it is one of the biggest investments that parents will make for their children. For clients thinking of paying the tuition each year, we discuss various scenarios to determine the best use of assets to meet all their goals.

For example: If your child enrolled in private school from kindergarten to grade 12, starting with a tuition of $16,500 per year adjusted for 3 percent annual inflation, the total expense by the time he or she graduated would be approximately $258,000. If you invested the same amount at a modest 7 percent average rate of return for 13 years, your investment would grow to approximately $332,000 by the time your child finished high school.

Assume that, after high school, your child enters college using loans that he or she will be responsible for paying after graduation. You keep the college savings account invested at 7 percent until he reaches age 60. This same account would grow to approximately $5.7 million. Along the way, you have the option to tap into these funds to help your child pay off the student loans or purchase a home.

If paying the private-school tuition for 13 years leaves little room for saving, will you be OK with postponing your retirement another five to 10 years or giving up annual family vacations? I have met with parents who struggled to keep their children in private school and are now leveraging their home equity to pay for college while retirement is approaching and appears unlikely to happen on schedule.

It is never too late to begin financial planning. Don’t wait until you finish one goal before focusing on the next. Look at your entire financial situation and all your goals at the same time to determine the best approach.

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Old to new | New to old
Nov 3, 2009 03:56 am
 Posted by

After reading this article, we did a quick calculation of 125 private schools with grades in K-12 and found that the average tuition was around $8,300 (less than half the amount mentioned in the article) per year for the 2009-2010 school year. The $16,500 mentioned above is only for the very top end of the spectrum and there were only 9 schools we found in K-12 with tuitions over $16,000.

Evan Leong

This has been flagged
Nov 3, 2009 04:00 am
 Posted by

"(less than half the amount mentioned in the article)"

Oops, I meant barely over half the amount mentioned in the article.

Evan Leong

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