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How to Pay for a Private School Education

There’s no question that affording a private school education for a child can be a challenge for a family. This article outlines some things to consider when determining how to make private school education more affordable.

Private school education is an investment in a child’s long-term growth and development. Private school education was once deemed an option only for the very wealthy. However, the majority of families choosing private school today are from so-called "middle-income" families. 

Just like making any large purchase, such as a car, a house, or a vacation property, it takes planning and research, and the farther ahead one can plan for their child’s education the better. Soliciting the advice of a financial planning professional is always a good idea, regardless of your stage in life. A trained professional can work with you to develop a financial plan that can assist you in achieving your goals whatever they may be – lifestyle, children’s education, retirement, etc. 

Here are some things to consider to help make a private school education a reality for your child or children:

  • Consider the benefit of extra-curricular sports and activities that are included in the program offered by the school. For example, the cost of a child participating in hockey lessons and tournaments may be included in the school fees.
  • Approach family members (like grandparents) or friends who are interested in your child’s education. Ask if they are willing to commit to helping pay for school fees, either by gifting or loaning funds to make this possible.
  • Ask what financial assistance, bursaries or scholarships are available through the school that you are applying to.
  • Take advantage of discounts available through early booking dates and accelerated payment schedules offered by schools, or look at extended payment schedules that may be offered - such as quarterly or monthly payment schedules. Note that extended payment schedules often come at a premium.
  • Look to your personal savings and investments as a way of paying for school fees. Consider lines of credits or taking equity out of your home through re-mortgaging opportunities.
  • Evaluate your own lifestyle choices and priorities. This may mean taking fewer vacations or vacationing closer to home (stay-cation) or putting off larger purchases such as replacing your car less frequently.

Unlike tuition fees to most post-secondary education programs, private school tuition is not considered a tax-deductible education expense. However, there are several opportunities that parents and caregivers may be eligible to take advantage of.

Child Care Expense Deduction

That portion of school fees not related to academic instruction may qualify as a deductible childcare expense. This may include those services and activities such as before and after school care programs (including lunch-time supervision). Fees paid to nursery schools and daycare centres offering programs for pre-school aged children (not kindergarten) are generally considered a childcare expense. Many private schools offer pre-school aged programs as well. This a great way to introduce children to a school’s culture and the fees are generally deductible. Room and board at boarding schools – which is the non-tuition portion of school fees – may also be eligible as a childcare expense, subject to certain weekly limitations. Over the course of a full school year, a child could easily maximize the eligible childcare expense deduction by attending boarding school. Generally, childcare expenses apply to children under the age of 16 years and may apply to older dependents with disabilities. Childcare expenses are claimed by a child’s parent or care provider, subject to certain guidelines and limitations set out by the Canada Revenue Agency (CRA). Further information regarding eligibility may be found on CRA’s tax folio S1-F1-C1: Child Care Expense Deduction.

Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction

Fees paid to a private school for children who suffer from a physical or mental handicap – mental, behavioural, or learning disability (i.e. ADHD, ODD, LD, etc.) - who require special service and support provided by a specific school may qualify as a medical expense credit providing certain criteria are met. This may apply even if some of the fees paid are considered for boarding and tuition expenses. Other expenses relating to travel for the child and caregiver to travel to the school may also be eligible to be claimed. Again, there are certain guidelines and limitations set out by CRA. Further information regarding eligibility may be found on CRA’s tax folio S1-F1-C1: Medical Expense Tax Credit.

Health and Welfare Trusts

If a parent or caregiver is eligible to claim school fees as a medical expense and if they own an incorporated business, they may be able to set up a Health and Welfare Trust through their business. When established, the business contributes funds to the registered health and welfare trust. The trust then pays the school fees. In this way, the contribution is an expense to the business and is not treated as income to the business owner personally. Trusts must be set up through a certified financial professional who is trained and licenced in these matters. Certain administrative fees may also apply to set up and manage the trust. Further information regarding eligibility may be found on CRA’s tax folio S2-F1-C1: Health and Welfare Trusts

Schools Offering Advanced Placement (AP) Courses

Since these are considered “post-secondary” courses, tuition fees for AP courses are generally eligible as an income tax deduction. This expense is treated the same as a student attending university or college or other eligible post-secondary courses and training. Students should receive a T2202A Tuition and Enrolment Certificate with the eligible tuition amount paid pertaining to the AP course(s), which they may be eligible to claim for themselves or transfer to a parent.

Schools Offering a Religious Component

Faith-based schools may attribute a portion of their school fees towards religious studies. If they are a registered charity they may be able to offer a donation tax receipt for this portion of their fees. 

With any of these opportunities, ask the administrators at the school for their assistance in guidance. And of course, do some research yourself and always seek professional advice from a licensed financial professional/accountant.

If you think that independent school education is right for your child or children and are not sure how to finance it, these offerings should give you something to think about in your planning.

Disclaimer: The preceding information and resources are offered for informational purposes only.  Robert Land Academy does not guarantee or warranty the accuracy of the information or one's eligibility under any of these options.  We recognize that each case is unique and subject to interpretation by others, including the Canada Revenue Agency (CRA), and is judged upon its own merit.