Why are private schools so expensive?

I have a child that will start kindergarten next year and we are looking at Head Royce and Redwood Day school in particular.  My question is why are these schools so expensive?  The standard answer we hear is that they offer small class sizes, and lots of extra programs such as music, art, etc., and, for higher grades, a plethora of AP options, tons of extra-curricular activities, etc.  However, the high-performing public schools in places like Orinda, Palo Alto, and much of Marin have all of these things, and generally operate on per-student budgets in the range of $10-15k per year, with parent groups and fundraising contributing another $2-3k, for total budgets in the range of $12-18k per year, per student.  Why do Head Royce and Redwood Day need to charge roughly double that amount to provide what appear to be similar services  (Kindergarten at HR is about $32k per year)?  It seems like tuition at these schools is literally 100% more than it should be.  What is going on here?

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First, private schools must pay a mortgage or rent.  Think of the price of real estate in the Bay Area.  Second, private schools must pay insurance. Third, private schools pay staff to do admissions and billing.  Fourth private schools often have smaller classes, especially after grade 2, so they pay for more teachers.  

I have served on the board of directors of a non-profit private school. They cost what it actually costs to run the school. Even compared to the districts you mention, they often have smaller class sizes, which means they need more teachers ($$$$$) for the same number of students. And they usually try to pay their teachers at least reasonably well. Often a lot of enrichment you don't get at public schools is already included in the price. And they usually offer scholarships or financial assistance which needs to be paid for by the families that can afford it. Also private schools often have to rent the building they are using, which can be crazy expensive in the Bay Area.

Couple thoughts. Non-cynical view: I think the class size is legitimately smaller at non-parochial private schools, as in 17-18 students instead of 22-25. Even the "good" public schools you mention are well over 20 students per class. That may well make a difference in learning outcomes. Private school tuition also subsidizes scholarship funding for students who can't afford some or all of the tuition. Cynical view: I was scandalized to learn what Heads of School earn at some local private schools. I'm talking northwards of $400K-$500K a year. Is that where you want your hard-earned money to go?

Hopefully someone with a background in public/private school financing will respond, but I'll give you my layperson's explanation.  I believe that the per-pupil spending for a public school district is the money that is spent by that district on classroom teachers and classrooms supplies.  I don't think that the per-pupil spending for public schools accounts for the facilities. Private schools meanwhile need to purchase real estate, construct facilities, and then service the debt on that investment.  If a private school leases its facility, it then must factor in the rental costs when calculating tuition.  There are also a lot of expenses involved in maintaining facilities (cleaning, repairs, landscaping, upgrades).  For public schools, I think that those expenses are funded separately from the teachers and classroom supplies, which is the bulk of the per-pupil spending.  Another factor may be that a private school may also set its "full freight" tuition on the higher side so as to be able to offer reduced tuition to needier students.  Take my comments with a grain of salt, as my kids go to public school so I have never needed to drill down into how my private school tuition is being spent.  Given the high cost of living, the need to offer competitive teacher salaries and benefits and the high land values and construction costs, however, it doesn't surprise me at all that private schools cost $30K+ per year.

We did private K-8 for our eldest and K-5 for his younger sibling in SF, then public middle and high school (in Marin). The reason private school is so expensive, at least in our case, comes down to two things: class size and extras. In our private school, kindergarten classes were capped at 15 kids with one teacher and one full-time aide. Throughout elementary, they had lots of extras, like 3-5 day offsite field trips to the Gold Country and San Diego etc., acting classes, swimming lessons etc. The school day was also a bit longer than public school and aftercare was included until 6pm. Our school was also a language immersion school, so that was the main reason we paid for it. Public school, even in our expensive Marin district, is great but always seems cash-strapped. Big classes (34 in many high school classes this year due to budget cuts), few field trips, etc. Teachers and staff work very hard, but they have a huge number of students, usually over 150 per year, so they have little time to give one-on-one assistance. There is one counselor for 400 kids. The upside is that sports, arts, theater etc. are better than private school--and free! We didn't have $200k to send our kids to public middle and high school and are super happy to have no tuition anymore. But there is a big difference in the two environments. Good luck with your choice.

As an experienced "former" private school parent I can tell you why it is so expensive: 1. The heads of school make as much as $500K, and there are many, many administrators at each school, all making between $150K - $300K (and some I've worked with who do very little for the school, may be the spouse of a teacher, etc.).  2. The school administrators and their boards are competitive; they look around at the other schools and say "Hey, I should be making as much/paying our heads and teachers as much as that other school. Let's increase our salaries." 3. You are paying for the connections who will give your child a leg up in college admissions, so if you are looking for good college connections, it is only worth it at the high school level. 4. Keep in mind that aftercare, music and sports, and all the extra-curricular activities at some private schools cost extra; they are not included in the $30K tuition. and 5. The school will expect you to contribute over and above the tuition, and participate in fundraisers -- all year long.

There are some great private schools who do outstanding work, are humble, don't spend excessively, are committed to their mission, and good in delivering it (see Black Pine Circle). I suggest you strongly consider public school, though. I bought into the "I want my child to have the best education" malarky, and chose private school for K-5. More experienced parents advised me early to try public school, and I regret that I didn't; I would have saved more for college and spent that money on more enrichment and travel opportunities for my family. Public teachers are outstanding; they have the patience and experience to do wonders in the classroom, and they are committed to your child's success. Importantly, think of all the "extras" you will be able to give your child with the money you've saved.

Here's why we left private school: Yes, class size is small, which means your child will have an ever-shrinking social pool.  In fifth grade my child finally said "Enough. I want to go to public school."  She needed the friends and experience that only public school can provide (private school is a little too sheltered).  We are happy in public school and haven't looked back.

These days, public districts like Palo Alto or Mill Valley are spending more like $15K-$20K per student ($256M budget for 12K students in Palo Alto this year, for instance)--and that's before any parent fundraising, which is often significant in the higher-income districts. So the increase in costs across the board is certainly part of it. Public schools also charge for many extracurricular programs and PTAs or grants generally pay for enrichment, while private schools often build those into tuition and the school day. Most private schools also tier tuition based on family income, which means every student at the school isn't paying that $32K--the average is probably closer to $20-25K. 

There is also a wide range of tuition at private schools, though. Head-Royce is the highest in the East Bay--if you're set on private, you could also look at a school like Grand Lake Montessori, for instance, which only charges $19K. Parochial schools are even less. And there are many in between. Each school publishes its budget and costs, so you can always take a look to see how the money is actually being spent, too. And I'd give a good look at public with some enrichment to fill the gaps, too. There are a lot of great public school options out there, even if they don't necessarily rate a "10" on an online metric. Those scores don't capture everything that's happening, so I'd visit both public and private with an open mind. Good luck with the search!

I don’t know, but some of it may be going to subsidize financial aid awards. We have a kindergartner in a Berkeley public school and we have an amazing teacher, engaged parent community, gorgeous campus and school building, music, dance, gardening, and many enrichment classes. For us, there is no where near enough added value at private school to justify the exorbitant cost. 

My guess is they need to compete with the excellent public school offerings. With housing costs astronomical in those areas, that is likely as much as the parent market is willing to bear. Only supposition though...

Private schools don’t benefit from public funding. Public schools receive funding from State and Federal grants. The public schools still fundraise as well to cover expenses. Also, $10-15k per student is probably not enough if we as a society we’re really going to fund the true cost of education including paying our teachers a more just salary. 

I have a partial hypothesis to contribute, and am curious, so I hope others reply with other pieces of the puzzle.  My child used to attend a small bay area private school (costing about $21K/year) that made its board minutes available, including a broad-strokes budget.  My memory is that that budget was 40-50% salaries and benefits, and 40-50% rent.  Everything else -- supplies, utilities, field trips, etc -- was the remaining 10%.  The teachers at this school were paid significantly less than public school teachers.  My hypothesis is that public school numbers do not include rent or equivalent building costs.  Head Royce is old enough that it presumably owns its grounds outright (though plenty of its buildings are newer), but Redwood Day bought its current campus in 1994 and might have a mortgage.  Many other private schools in the area rent their buildings.  I am guessing that the public school dollar figures you're mentioning don't include these kinds of property costs.  I could be wrong.

The per-student budget breakdown of public schools rarely include expenses like capitol outlay, administrative costs, and a variety of other expenditures (each district can categorize expenses somewhat differently). Private schools typically have capitol and loan expenses (bc it's private property) and as they are not part of a larger district/system, the admin and other non-instructional personnel costs are also to be considered. There are many other factors (i.e. benefits cost more for personnel at private schools bc they don't have the bargaining power of large districts) but these are a couple biggies.

We chose public for various reasons but have considered private schools since we could afford them and there is definitely a benefit in going there.  Private schools tend to have a closer knit community then many public schools (based on what I saw and heard from parents), smaller class size, more enrichment etc.  They might be comparable to a few schools in expensive areas but not many can afford to leave in those areas, and many many families live in areas assigned to schools that are significantly worse than private schools.  I always viewed it as supply and demand issue.  All of the private schools we have considered either had testing to get into or other application process and there was no guarantee that my kids would have been able to get in, so instead of risking having to go to our then assigned public school we moved to an area with a very good public school which my kids now attend.  So whether or not there is a reason for it (and I did wonder where all of the tuition money was going since the private schools still ask for donations just like public schools do) there are plenty of people willing to pay those prices so I don't see them going down anytime soon. 

They are charging 100% more because they simply *can.* -- As the wealth of the East Bay continues to rise, schools like RDS and HR essentially have their pick of students and it boils down to who can pay the price.  More money means that they can afford to provide financial aid to diversify their student populations, but to also add some pretty fancy perks to those students attending.  Financial aid is generally available at both schools.  RDS offers many scholarships to kids in the neighborhood, so check it out, especially if you live in the Dimond.  My advice is to not limit yourself to these two schools.  Check out St. Paul's, Park and Black Pine Circle, too.  Additionally, a lot of parents at RDS send their child to their local public kindy or charter before starting at a private school.  It saves them a year of tuition and then they start first grade.  There is always attrition after kindergarten due to many things -- parents moving away, development or behavior issues, etc.