It is important to note that attending university costs a small fortune. And the more prestigious the university, the better the career prospects – because of the reputation of the university, better supervision, fellow students et cetera (see my post about universities).
But not every student has the chance to attend one of the best universities in the country. The demand is high and the number of spots is limited. Just under 27 percent of all students are granted the opportunity to attend a Russell Group University. The elite universities of Oxford, Cambridge and London offer spots to just 6 per cent.
This raises the question of how one can help one's children fight for these coveted places. The most important criterion for admission is the last grades (A-level) in school. The tests are standardised, but the quality of schools varies enormously. Therefore, the choice of educational institution is of great importance.
Basically, there are two options. The first would be to find a good state-funded school. Every child is free to attend such a school. But the family has to live in its area. And that can be expensive. Because for the reasons mentioned above, ambitious families aspire to live in the vicinity of good schools, driving up property prices even more than in other areas.
According to a study by the Department of Education, the price of houses near a top-ranked school, i.e. top 10 per cent, increases from 6.8 to 8 per cent. For London, an increase of £33,000 is given for secondary schools and £38,800 for primary schools.
The second option is to attend an independent school. These are privately funded, usually an annual fee needs to be paid. (These are also called private or public schools… Latter to confuse foreigners, I guess.) This option provides more chance of attending a better university. According to the Independent Schools Council, only 6.5 per cent of UK pupils attend independent schools. However, almost 33 per cent of British students at the elite universities in Oxford, Cambridge and London got a private education. If only Oxford and Cambridge are considered, the figure is as high as 39 per cent.
The degrees at prestigious independent schools are simply better than elsewhere. The average grade at English schools is a C+. Www.best-schools.co.uk lists the results of 100 independent schools. At the best independent school, 92.11 per cent of students achieve an A or A* (as of 2019, before the pandemic, with its chaos). The best school is usually not the world-famous Eton College, which came 13th with 80.3 per cent, but Oxford International College.
Incidentally, my wife's school, St Paul's Girls' School, was in third place, with 85.35 per cent. And in 2018, it was ranked at the top. (A fact my better half wants me to mention specifically.) As with universities, a good school can count as a distinction. St Paul's is a regular among the top 5 schools in the country.
Even at the 'worst' independent school on the list, 52 per cent of grades came from the A*/A range. A hefty price tag, however, is attached to these grades. The most expensive school in the ranking was Charterhouse School. The fees were £33,630 per year. And that was just the day fee. Among boarding schools, Abbey College Cambridge charged the highest fee at £51,450 per year. Eton "only" charged £42,501.
The median annual fee of the top hundred schools was £19,500 excluding boarding costs. There is little difference in fees between top places and those at the bottom. They depend more on location than on final grades. London, Oxford and Cambridge are expensive. Outside the hotspots, as little as £13,000 a year affords one a place at an elite school.
A school year at St Paul's Girls' School costs more than £27,000 (no boarding). When I told my better half about the fees, she was momentarily taken aback. In her day, not even 15 years ago, it was just under £9,000. As with nurseries, universities and property, costs have exploded in the last 20 years.
St Paul's website lists which universities the graduates went on to attend. In recent years, 83 per cent of students went to Russell Group universities, with 41 per cent going to Oxford and Cambridge alone.
The rest of the pupils did not to attend bad universities: Another 14 per cent obtained admission at (elite) American universities. The rest attended small but excellent universities like St. Andrews. Sending children to a renowned independent school almost always guarantees access to an excellent university and thus excellent career opportunities.
But how to afford the cost of education? Let's assume a favourable case. Your child attends a state funded primary school before transferring to an independent secondary school for the next 7 years at an annual fee of £13,000. That is £91,000, not even including the additional £27,000+ for an undergraduate degree.
A middle-income family could never afford the cost. And even high earners will struggle, already burdened by living costs, pensions and daycare fees.
The Financial Times has tackled this problem and published tips on financing:
Early planning is key. If you don't start saving until the child is born, it's almost too late, or your savings need to be invested more riskily. If one withdraws £550 of monthly income and receives a 5 per cent profit per year on it, a little over £90,000 should have accumulated by the time the child goes to secondary school.
If your own financial strength is not sufficient, you could ask your grandparents for start-up funding. Cleverly done, there are even tax advantages, e.g. if you start a family business in which the grandchildren are partners. Now dividends can be paid to them. However, this form of intra-family financial transactions are quite costly and makes more sense for larger sums of money. Moreover, the company must not be set up for this purpose alone.
If no rich grandparents or uncles are available, you could borrow money from a bank, for example as a loan or mortgage on the house. Or you can have part of your pension paid out.
Finally, there is the possibility of reducing the annual fee payable, for example, through a discount for a second child or through a scholarship. In fact, lower contributions are due for a third of the students. However, the saving is usually only a low two-digit percentage or less.
For pupils from poorer families, some schools waive a larger share of the fees. Special pots with donations are often available for this purpose. However, there are hardly any full scholarships; only about 5,700 pupils, less than one per cent, can attend a public school without paying fees.
By the way, my wife was one of them. Without a full scholarship, attending her school would have been unimaginable even 20 years ago.
But is the type of school really that important for career prospects? Aren't schools just one of many factors, alongside aptitude and motivation, or environment at home, including parental influence?
When I asked graduates of independent schools in our British circle of friends how important these were for their career, the typical answer was: “The time at my school was wonderful, I wouldn't want to miss it, but I would have been successful either way. After all, my talent has nothing to do with school.”
That was good to hear. Stupidly, I always asked another question, and that was whether they wanted to send their children to a state-funded school. Then they looked puzzled for a moment before answering: Absolutely not, an independent school is a must!!!
Their words were delivered with such determination that I suspected other reasons behind their conviction... but more on that later.
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