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Are private schools worth it?

Jan 17 2011 12:46 Helena Wasserman

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THE push and pull factors when it comes to private schooling have never been so brutal.

On the one hand, reports about a breakdown in the state schooling system (some 80% of public schools may be “dysfunctional”), large class sizes and last year’s teacher strike are creating a greater demand for private education.
 
But on the other, household finances are taking enormous strain, with more than 11 million South Africans now behind on paying their debts.

Few can afford to pay higher school fees.
 
From one perspective, having a private school education can also work to your child’s disadvantage when trying to get into the tertiary institution and course of her choice.
 
While some private schools (particularly in the Western Cape) still do the National Senior Certificate (NSC) exam, most use the Independent Examinations Board (IEB) matric exam. The IEB, like the NSC, has to be certified by Umalusi, the national qualification authority.

Eddie Conradie, marketing manager at Curro Private Schools, says some of their schools are switching over to the IEB due to concerns about grade inflation and “block adjustments” in the NSC exams.
 
Marc Falconer, the headmaster of the King David High School, Linksfield, contended in an article last year that the IEB is a different kind of assessment.

“In the state system it is perfectly possible to achieve a good matric by drill and practice, while this is not true for an IEB candidate.”
 
According to one headmaster of a private school it is “cognitively more demanding” than the NSC and prepares students better for tertiary education.

Most see the IEB as the tougher exam, making it more difficult to achieve distinctions and university admission.

But tertiary institutions are not allowed to distinguish between IEB and NSC results. This means that an IEB candidate, who may have achieved better marks with the NSC, will be at a disadvantage when competing with state school matriculants.
 
But once you do get your university place, IEB students fare well. According to one study at the University of Cape Town, IEB candidates made up a quarter of all UCT graduates in December 2007. The drop-out rate of IEB matrics was only 2% - compared to between an estimated 35% to 50% at SA universities on the whole.

While private schools only represent 5% of the school system, they deliver a disproportionate number of graduates in scarce skills like maths and science, says Simon Lee, communications co-ordinator for the Independent Schools Association of Southern Africa (Isasa). In the sought-after health sciences courses, the UCT study showed that 25% of students were ex-IEB.
 
A private education, which presents an undeniably great “networking” opportunity among SA’s upper classes, could also assist your child’s career later in life.
 
According to one recruiter, “a Bishops matric plus a Damelin diploma” can still even out an education at an average state school with a post-graduate qualification at a good university. “The perception is that private schools encourage independent thought.”

An education at an established and well-known private school will work to your advantage in getting a job, agrees Debbie Goodman-Bhyat, managing director of Jack Hammer Executive Headhunters, which only focuses on senior management placements.
 
If you went to the same school as an interviewer, or a school that he or she is familiar with, there usually is a “comfort level” and some affinity, she says.
 
But while it will get you into the door, a private schooling won’t secure you the position, she says. There are also some very good state schools with great reputations in business, she adds. She singles out Westerford High School in Cape Town.

But there is no denying that private education is quickly gaining traction in South Africa.

Some of the most attractive features of private schools for parents are accountability and the ability to select their own staff, curriculum and method of assessment, says Lee. State schools can struggle to get rid of teachers who don’t deliver, and can only follow the state curriculum and write the state senior certificate.

He says there has been a surge in faith-based and “corporate” schools, which usually charge between R18 000 and R25 000 a year.

The fees of some state schools like Paul Roos in Stellenbosch and Westerford are also closing in on the R20 000 mark, while top-end established private schools like Michaelhouse charges more than R160 000 - boarding included.

Some of the prominent corporate players in education are Advtech [JSE:ADH], which owns the Crawford Schools and Trinity House, and Paladin Capital [JSE:PLD], a PSG Group [JSE:PSG] subsidiary, which owns 76% of Curro Holdings. Curro is opening nine new schools this year.

The emergence of corporate schools is not universally welcomed in private schools circles. Lee says there is a debate whether schools should ultimately be responsible to shareholders, or whether children’s interests should be the sole driver of all decisions.
 
According to one private school educator, who wanted to remain anonymous, some of the established not-for-profit private schools earn up to 50% of their income from “old boys” contributions and don’t have the same financial pressures as other private schools, which have to invest in new buildings and other infrastructure, while having to keep shareholders happy.
 
There has also been an explosion in low-fee private schools, which charge on average R682 per month. According to research from the Centre for Development and Enterprise (CDE), there are hundreds of these schools in abandoned factories, shopping centres and high-rise buildings.

The CDE study showed that a quarter of the private schools were unregistered, and therefore technically illegal.  However, teacher absenteeism was non-existent in these private schools and test results are markedly higher than in the state sector.

How far should you go to afford private school?

Many people are scaling down on retirement investments to pay for private schooling, says Suzette van Niekerk, head of Exceed Asset Management and Private Client Services.

This could make some financial sense – giving your child an education which could assist in ensuring solid career opportunities will reduce the risk of his dependency on your pocket in later years.
 
“The main concern for parents is that their child won’t pass once they reach university. You need to ensure that the basic foundation is there for the child’s tertiary education.”

Cutting back on your savings in order to afford school fees is not a complete disaster, agrees Henry van Deventer, the head of financial planning coaching at the independent financial services group acsis.
 
“If you are going to consider doing this, remember that it will have some likely consequences. Being able to maintain your desired lifestyle at retirement may now require that you either retire later or save more once your kids’ education is paid for or (likely) need to find the best combination of these two considerations," he said.

A financial planner will be able to help you understand what needs to be done in this regard in the long term.
 
Also:

1. Cut back on your expenses.

“The affordability of school fees is heavily influenced by how much ‘fat’ we have in our budgets,” says Van Deventer

Continue to make sure that your fixed expenses are kept as low as possible. Ensure that you are not paying more than you should towards medical cover, life insurance (death and disability cover), short term insurance cover and other such expenses.
 
“Reviewing these costs with a qualified professional at least once a year is important in this regard. You may also find that the costs of life and disability cover are cheaper through your employer’s group benefits.”

2. Check – and peg - your lifestyle. Funding a new expense like education is often best done by cutting back on an existing one, Van Deventer says.
 
“Often adjusting our lifestyle habits – like the cars we drive, when we replace them, funding with debt and our holiday and relaxation habits – frees up more money than we might think. By deciding on a disciplined approach around this and redirecting what we save to education, much can be accomplished.”

3. Pay in advance.

You may get a discount if you pay your school fees in advance. Get into the habit of setting your annual bonus aside towards your school fees.
 
4. Make sure you get value for your money.

The education should be worth the financial sacrifice. Do extensive homework before deciding on a school. Don’t exclude state schools from your list, many are excellent. Scrutinise matric academic results. Also ask for the results of literacy and numeracy testing, which some schools do in lower grades.

Be very wary of the “hard sell”. A school must have a good word-of-mouth reputation – marketing bells and whistles should sound alarm.
 
5. Apply for bursaries.

“Bursaries are not always intended for the best and the brightest. Sometimes, they are focused on providing an opportunity for someone who is not able to afford to pay for it. Ask around and see what’s available – you may be pleasantly surprised,” says Van Deventer.

-  Fin24
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