What are the options to ease the full burden of school fees when you decide to send your child to a private school? Gillian Upton has some answers
One look at the plenary sessions tackled at the Independent Schools’ Bursars Association (ISBA) annual conference last year indicates the state of play in the independent schools sector: affordability, income generation, means-tested bursaries and debt management. Overlay those with ‘Inside the battle for Brexit’ and ‘Should we worry about the economy’ plenary sessions from ISBA’s 2017 conference in Manchester this summer, and a clear picture emerges of the challenging times ahead for schools.
“Whatever we do is tagged to the economy,” explains John Murphie, ISBA’s director of finance & resources. Schools are diversifying to make sure their assets are working for them and earning incremental income when the children are not there.
Independent schools have to balance the desire to remain affordable with the need to cover increased costs. Naturally, fees have to go up to allow schools to operate but they also want to remain as open as possible to the local community.
“INDEPENDENT SCHOOLS HAVE TO BALANCE AFFORDABILITY WITH THE NEED TO COVER INCREASED COSTS”
FIGURING IT OUT
In 2016, across all surveyed schools (junior and senior), total concessions of £621m were granted (£589m in 2015). This amounts to 10.1% of the sector’s gross fee income of £6.14bn; in 2015 it was 9.9%. So the percentage is creeping up year-on-year, meaning £1 in £10 of headline fees are now waived in some way.
Nearly 50% of all concessions are means-tested bursaries. In 2000 this figure was only 35%. “This demonstrates the significant amount the sector is doing already,” says The Independent Schools Financial Benchmarking Survey from Baines Cutler Solutions, from which the above statistics are taken.
Sally-Anne Huang, head of JAGS, sees bursaries as “adding to the socio-economic mix of the school.” So what hope do parents have of getting Little Johnnie into the school of their choice without the sting of paying the full fees? That they will still want to, despite the uncertain financial backdrop, is supported by ISBA statistics that show that during the last recession their member schools did better than ever at attracting pupils. “People treat the education of their children as an essential, not a luxury,” said ISBA’s Murphie.
“THE ONLY OPTION IS A MEANS-TESTED BURSARY AND IT IS HERE WHERE SCHOOLS ARE INCREASING THE AMOUNT OF FEE ASSISTANCE TO EASE THE FINANCIAL BURDEN”
Moreover, the need for parents to find help with the fees is even greater today as they are rising more rapidly than our incomes. Fees at independent day schools have more than quadrupled since 1990 and have increased ahead of earnings every year since then. London parents are hit hardest, with the highest hike in fees of 4.2%, compared to other regions.
Furthermore, one of the two established ways of reducing fees – through scholarships – has shrunk beyond all recognition. What might have eased the burden of full fees by up to 75% is now a paltry 15% on average, according to ISBA. Most schools are capping scholarships so today they are more about the kudos than the cash. At Trinity School, for example, most scholarship awards are in the 10% to 20% range.
DID YOU KNOW…
…THAT SCHOOL FEES ARE RISING MORE RAPIDLY THAN OUR INCOMES?
“A scholarship is an acknowledgment that you’re up at that level, that’s all,” says Sally-Anne Huang of JAGS. Her school’s scholarships are worth around £1,000. Newton Prep’s head Alison Fleming agrees: “I think scholarships are increasingly for the honour, to recognise talent,” she says.
The only option is a means-tested bursary and it is here where schools are increasing the amount of fee assistance to ease the financial burden. Good news at last.
“We’re offering more and more bursaries as customers are feeling the pinch,” says Nathalie Hart, deputy head pastoral at Royal Russell. It’s a common picture across all schools.