My older daughter is currently in 7th grade. Recently, I started doing some research on private high schools in my area, trying to decide if we should send her to a private school. I live in Cupertino, California with an excellent but super competitive public high school: Monta Vista High. There are also a good number of elite private high schools in the area, which are hard to get into and very very expensive. We are talking about $60K a year tuition with 9 months of instruction!!! Although my family can afford the tuition, I have a hard time convincing myself that the $60K price tag is worth it. I feel this is basically education at all costs and anything at all costs is problematic in my book. Anyway, I don’t want to make this $250K decision for my daughter. Instead, I am listing out the tradeoffs of going private and let my daughter decide if she wants to go private. .
Advantages of Private High Schools:
Less stressful high school life
Easier to get into top colleges
Smaller class and a tighter-knit community
Slightly higher quality of instructions
Upper Class school mates(?: Not sure if this is an advantage)
Advantages of Public High Schools:
$250K savings
More diverse student body
Friends/Classmates in the same neighborhood
Competitive and hardworking culture
Lower likelihood of substance abuse or woke curriculum
If we compare the pros and cons from a pure financial perspective, in order for the $250K *investment* to make sense, assuming a 9% annual return, my daughter will need to save an extra ~$24K a year (after tax) for 30 years in order to make the private school tuition math work. (Note: =PMT(0.09, 30, 250000) is the exact formula I used in excel to calculate this.). Could my daughter save an extra $24K a year by getting into a better college, having more rich and powerful friends and hence make more money? I just checked the college board website. The median annual earnings for a UCLA graduate is $79,826 while the median annual earnings for a Harvard graduate is $95,114. I suppose it’s still possible to save an extra $24K a year but it doesn’t seem straightforward to pull this off.
I plan to tell her that if she decides not to go to a private school, I will deposit the private school tuition into a mutual fund account and she will have full access to the money when she turns 30, which she can use to buy a house, start a business, take a lower pay but more satisfying job, etc, etc. But she will have to endure a more stressful high school life and she might end up going to a less prestigious college compared to her private high school counterparts, which could have some negative impact on future opportunities. But life is full of tradeoffs. My job as a parent is not to make her life easy but to make sure she grows to be an independent adult who can take care of herself and make good choices. I believe this is a good place to start her adulting journey. Life is full of hard choices.