Private school fee rises may exclude middle-class families, principals fear

Private schools are grappling with how to plug the loss of tens of millions of dollars in government money under new funding rules, with some principals fearing they will have to raise fees so much the schools will be out of reach for middle-class families.

Options range from significant fee hikes to program or staff cuts, increases in student numbers or more fundraising, said the principals, who were approached by the Herald.

Most said fee rises beyond the annual average of about 3 per cent were most likely. The stress is keeping everyone up at night, said one.

However, critics said private school fees rose even when government subsidies were going up – some have kept pace with Sydney house prices – and there was no reason why schools could not cut back on their educational programs, as lesser-funded government schools with similar demographics performed just as well.

Some independent schools will lose money as funding levels are adjusted for fairness under the Gonski model, which introduced a Schooling Resource Standard (SRS) to calculate how much government support private schools were entitled to when parental income was taken into account.

Due to complex funding deals over decades and a longstanding reluctance to take money off schools, some private schools – many of them mid-priced, charging up to about $25,000 per year – have received much more government money than the SRS determined they needed.

Under agreements struck in 2018, the over-funding will be gradually wound back over a decade.

A new system of working out how much parents can afford to pay, based on taxable income rather than census data, has also meant some school communities have been identified as wealthier than originally thought, meaning they will lose more money than anticipated.

The funding cuts will be phased in gradually until 2029. The Morrison government gave the non-government sector a $1. 2 billion choice and affordability fund to help schools make the transition. Public schools are under-funded in relation to the SRS, and will only reach 95 per cent of their entitlement by 2029.

None of the non-government principals contacted by the Herald complained about the funding changes. They spoke anonymously to allow them to comment freely. However, they said the funding loss would require measures that could change the character and make-up of the school community by making them too expensive for middle-class families.

Private school fees usually rise by about 3 per cent a year; affected schools would have to raise fees further.

Waverley College, which costs up to $17,400 a year, wrote to its families predicting it would lose $27 million in government funding over the decade to 2029, equating to a 37 per cent decrease.

It is a significant challenge to balance affordability and the high-quality educational offerings for which Waverley is known, it wrote.

Principal Graham Leddie told the Herald the school absorbed a $1. 6 million decrease in government money in 2021, but this year had to increase fees by around $375 per student, per term. A survey of parents found they considered the increase reasonable and affordable.

Another principal of an Anglican school facing multimillion-dollar losses said the budget would be cut as tightly as possible, and when we can’t cut it any tighter, we’ll have to put the fees up.

What we’ll end up with is like England – independent schools will only be available for the very richest people, the principal said. Then schools really will be elite, they will not be available to the middle classes.

The head of another Catholic independent school, which will lose millions a year, said the school hoped philanthropy would help. Approaching alumni, back to fundraising, they said. We’ll have to put fees up. There’s no room to raise numbers. We’ll survive, but it’s difficult, the transition period is really hard.

The principal of another school, which has received a significant amount of money above its SRS due to funding deals struck during the Howard government, and had fees similar to Waverley’s, also feared losing the school’s middle-class families. He did not want to cut back the school’s educational offering, as families had come to expect a standard from the school.

Putting fees up completely changes our mission, they said. Some parents are wealthier, but we still have poor, and many parents with massive mortgages.

However, the president of the NSW Teachers Federation, Angelo Gavrielatos, said private schools were continually putting their fees up, and families were no less willing to pay them. The more pressing issue was getting public schools to 100 per cent of their SRS.

We need to come to terms with a harsh reality in Australia. Our public schools remain underfunded while private schools are overfunded, he said. That’s the discussion, not private schools crying foul. The funding has not gone where it’s needed.

Chris Bonnor, the co-author of a book on funding reform, Waiting for Gonski, said private school fees had kept rising even while their government subsidies grew, and there was no reason why schools could not cut their educational offerings instead of raising fees.

They’ve got to come to grips with the fact that they are getting the same results as similar government schools, no matter how many fees they charge, he said. Schools that enrol similar kids get similar results, but the non-government sector is pouring more money in.

Geoff Newcombe, the head of the Association of Independent Schools of NSW, said 27 independent schools were nominated by the government for transition assistance, and the association identified another 23 regional schools as needing support.

The association was also helping schools develop business models and financial governance structures as they transition to a lower funding level.

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