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How to afford private school K-12 tuition

Amy Fontinelle

Posted on September 13, 2023

Amy Fontinelle is a personal finance writer focusing on budgeting, credit cards, mortgages, real estate, investing, and other topics.
Paying K–12 school tuition
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List some of the funding options families might have that can be used to help afford private school.

Describe some of the financial aid and payment plans various private schools may offer.

Point out the pros and cons of various loan options that might be available to pay for private school. 

The nationwide average for private school tuition in 2022 is $12,139, but that cost varies by region and by school type and can exceed $30,000 in some cases, according to statistics from one online school directory.1

So, how to pay for private high school?

Fortunately, there are many ways to manage the cost of private school tuition.

Coverdell education savings account

Parents with a modified adjusted gross income of less than $220,000 ($110,000 if filing single) can contribute up to $2,000 per year to a Coverdell ESA . Contributions come from after-tax dollars and grow tax free. Distributions aren’t taxed when used for qualified education expenses such as private school tuition and fees, books, supplies, uniforms and tutoring. (Related: Understanding Coverdells)

Family and friends who normally give your children birthday and holiday presents can help with cash gifts that you place in an ESA.

Roth IRA

Your Roth IRA contributions (but not your investment returns) can be distributed at any age without penalty, said Lisa M. LaMarche, a certified public accountant, certified financial planner and registered investment advisor at Milestone Wealth Advisors in Greenville, Delaware, in an interview.

“If you are eligible to contribute to a Roth IRA when a child is born and you invest $5,000 for 15 years, you would be able to take out $75,000 tax and penalty free when they enter high school,” she added.

You shouldn’t compromise your future financial security by tapping your only source of retirement funds, but if you have other assets such as a 401(k) and don’t need to rely on a Roth IRA for retirement, this is a good option, Marche said.

The investment income your contributions earn will keep growing even after you withdraw the contributions.

529 plan

Under the Tax Cuts and Jobs Act passed in December 2017, you are now allowed to take a qualified distribution of up to $10,000 per year for K–12 tuition at any public, private, or religious school from a 529 college savings plan.

Obviously such plans are aimed at funding college, not high school. However, there can be circumstances that can make such an option attractive. Perhaps the plan for your child is running well ahead of projected college financing needs. Or maybe a 529 plan intended for an older sibling wasn’t used and can be transferred. (Learn more: Alternative uses for 529s )

Using this option depends on your state, however, because states aren’t required to follow the federal law. Regardless of what state your 529 plan is based in, the laws of the state where you live apply. If your state doesn’t allow the use of 529 savings for K–12 education and you do so anyway, you will have to repay any state tax deductions you took in conjunction with the plan. And the money can’t be used for home-schooling expenses.

School financial aid

Some private schools offer financial aid based on a family’s income, assets, debts, number of children in tuition-based schools and extenuating circumstances, such as high medical bills. There’s no income cutoff, so don’t assume you won’t qualify. If your family’s expected contribution is less than tuition, the school may make up the difference, according to the National Association of Independent Schools.

Every private school is different and it’s important to know how much assistance a school will provide, said Sean Moore, a Certified Financial Planner™ professional who holds the Chartered Financial Consultant designation, who helps families plan for private school and college tuition costs through his financial planning firm, SMART College Funding in Boca Raton, Florida. “Some schools will be able to offer assistance to any family in need, while others may have a very limited aid budget that is doled out on a first-come, first-served basis,” he said.

Moore said to apply as early as possible for private school financial aid to get the best shot at “first come” money and to formulate a backup plan if financial aid is declined or is less generous than expected.


Scholarships are not a significant source of financial aid for K–12 education, according to NAIS. Most private schools don’t offer them; you’ll have to search for national, regional and local scholarships with the schools themselves or through online resources. Even then, awards are small — typically a couple thousand dollars — and your child will compete for the funds, which are sometimes restricted to low-income families, minorities, or special needs children. Scholarships are still worth looking into, but don’t plan to rely on them.

Payment plans

If paying tuition in the usual one or two lump sums per year is a challenge, look into payment plans. Many schools offer them.

Some plans are run by third-party vendors. Some schools manage their own payment programs. Payment plans may entail a nominal fee — roughly $50 to $150.


There are no federally subsidized loans for K–12 tuition like there are for college tuition, and schools usually don’t offer loans directly, but commercial options exist if you need to borrow.

For example if your child will attend one of its 12,000 eligible schools, Your Tuition Solutions offers 24–84-month loans of up to $50,000 with fixed annual percentage rates ranging from 3.99 percent to 24.99 percent depending on creditworthiness, loan term and amount borrowed. This option could be good if you qualify for a low APR. But experts advise avoiding expensive options such as credit cards and education loans with high interest rates and disbursement fees.

Sallie Mae, a student loan company that originally started out as a government entity, also offers K-12 loans . An unsecured personal loan from a bank is also a possibility.

If you have a permanent life insurance policy with a substantial amount of cash value built up, you can tap those funds to help pay for private school. But there can be negative consequences, as borrowing against life insurance cash value increases the chances that the policy will lapse, reduces the cash value and death benefit, and may result in a tax bill if the policy terminates before the death of the insured. (Related: Treating cash value with care)

A home equity loan lets you borrow a fixed sum at a fixed interest rate and repay it over as many as 30 years. Since these loans are secured by your home, they have lower interest rates than credit cards, tuition loans or personal loans, and the interest is tax deductible if you itemize. The biggest drawback is that if you can’t make your loan payments, you could lose your house. (Related: The pros and cons of home equity loans)

Moore and LaMarche don’t like this option.

“The danger is that kids will have finished K–12 schooling and the parents will still have the debt,” LaMarche said. You want your home paid off before retirement to keep your options open, she said.

Moore added, “In my opinion, there are very few places in the U.S. that the public school system is so bad that a family should go into debt, mortgage their home or raid retirement accounts to pay for private school.”


About five million students nationwide attend private elementary or secondary schools, according to the National Center for Education Statistics. If their families have figured out how to afford private school, you can, too. Your expected contribution can vary significantly by school, so it may be worth having your child apply for acceptance at several schools, then seeing what your actual cost will be after going through each school’s financial aid process.

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1 Private School Review, “Average Private School Tuition Cost (2019-2020),” 2022.

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.