Private School Fees and Servicability

Off topic perhaps but any consideration given to going public? Grown up with even mix of both in friendship group, no discernable difference in life outcomes by 40.

 

Yes, we certainly considered that. I went to selective State School myself (arguably best school in country) so very open to going public. Went to a number of open days at public schools re my daughter. Made decision on a particular school (happened to be private) based on unique interests of my daughter, location and particular offering by school. So, was not really a blanket public v private type call for me.

 

Thanks Rolf.

So, if total school fees over the 6 years of secondary school are $120,000 ($20k per year),

AND you can show to the bank a share porfolio or term deposits of at least $120,000 (ie. have ready cash or equivalent to fully fund school cost over remaining secondary school years),

AND you don’t include the income from the term deposit or share portfolio in servicability calculation,

THEN the bank will not generally not ‘penalise’ you by insisting on including the $20k as a living expense in the servicability calculations.

Just checking my understanding is correct. Appreciate policies may vary among lenders.

 

Kings at Parramatta? They're selective....You must have sufficient income to cover the school fees. If you don't, you're not selected.

 

No

 

Thanks Rolf. Assuming you have 5 years of school fees ahead of you (1 child, $30k per year), would you need $150k in cash equivalents (shares) to ensure the payment does not impact serviceability??

 

1 year in advance or the full 5 years in advance?

 

No need to pay the school fees in advance. Just have someone else pay them for you.

 

What about establishing your own discretionary trust with sufficient funds to pay all school fees?

 

Its worth it to keep the wealth in the gene pool:

https://www.smh.com.au/national/nsw...raduates-comes-to-sydney-20190523-p51qh9.html

 

Guessing James Ruse.

 

Needs to be carefully structured to avoid lending issues

 

No, MHS actually.

 

Well then if they go to UNI you may choose to pitch in too...? I assume it is over the moment they get a full time job!

 

Remember too most private school fees increase yearly and usually more than the inflation. In addition there will be those private excursion if they choose to do music, or choir, or sport or else...
It usually does cost extra, those overseas expenses and experiences.
My finished now but and luckily the loan calculators then did not cover such personal expenses...these are recent changes though so I am unsure how you would go about it.

 

In regard to the bank expenses declaration just lie. I’ve lied ever since they came in. It’s an unwanted burden demanded by regulators and no one would notice or check what school your kid goes to.

If you are genuinely worried about cashflow that’s a different matter; everyone in my family gets scholarships or goes public. (We all got scholarships or auditioned for the Con etc)

If you don’t get a scholarship why would you pay, unless there a very special reason relating to disability autism etc? (I’m a teacher in a public school )

 

Gets hard to lie when there is a transfer showing up on the bank statement. Withdrawing cash would be better, but that even shows up.

 

My only consideration here is serviceability in applying for another loan. Have upfront cash/shares to pay fees for next 5 years, but would prefer to invest the money myself (v paying 5 years upfront to school) to maintain some flexibility, retain control over funds, and invest on my terms. Other than this servicing issue, paying such a large amount of money to any organisation upfront makes little sense (I don’t like being an unsecured creditor for such large amount of money). If the $30k/year is counted as a normal monthly expense on the banks servicing calculator, then loan servicing is negatively impacted.