Parents should plan for rising education costs

Parents need to plan for education costs.

Parents need to plan for education costs.

Despite government plans to direct further funding to education, parents’ concerns about the increasing cost of their children’s education are not over, warns Matt Walsh, head of Lifeplan.

“The cost of education has been steadily increasing for some time now and there is no reason to expect this to change in the future,” Mr Walsh said.

“Increasing State and Territory acceptance of the Gonski model for school funding might suggest to parents that the cost of their children’s education will fall, but in my view this is unlikely to be the case.

“There are two major aspects to education costs to consider which indicate the burden of these costs will continue for parents.

“Firstly, there is the increasing cost of education as a whole, which is outstripping rises in the consumer price index (CPI) by a rate of more than two to one*.

“For the 12 months ending June 2013, education costs rose by 5.7 per cent whereas the CPI rose 2.3 per cent.

“This is a major trend that has been consistent for over a decade. The Gonski model is not designed to ameliorate this.

“Secondly, the main objective of the Gonski model is to improve the standard of education – particularly in disadvantaged schools – rather than evenly fund increases to all parts of the education system.

“Overall, despite the optimism being created by the Government putting more into education, parents with children at school shouldn’t expect to see much difference to their costs, and shouldn’t be complacent. This will be particularly acute for parents seeking private schooling for their children.

“Parents should still consider starting to save in advance for their children’s education, even if it’s just a small amount each week, as this can add up to quite a lot over time,” Mr Walsh said.

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