Public Vs. Private: The Education Debate


One key element of good parenting is providing all of the educational opportunities that would give their children the best chance of succeeding in life.

Spectrem research shows that most wealthy people regard education as the second-most significant factor in their personal wealth creation after hard work. Most of the wealthiest people in America earned at least a bachelor’s degree in college, and many others went on to graduate degrees, law or medical degrees, or some other form of advanced educational certification.

But there is a difference of opinion among parents about what type of school constitutes a quality education. Many people believe in the education provided by public schools for K-12 students, while others consider private schooling to be the way to go.

Spectrem’s topic-specific study on parenting and finances shows where the divide between public and private schooling preferences lie, and it is not just a divide created by wealth. Parenting and Financial Decisions asked investors numerous questions related to the choices parents have for the education of their children, not only for elementary and secondary schooling, but also for the decision whether to go to college or technical school when their child graduates from high school.

The general argument for private school is that the education is better in part because class sizes are often much smaller. No one can argue that a teacher teaching 10 kids is more effective than the same teacher working with 20 children. Private schools also have more freedom in academic curriculum because they do not need to respond to state and federal guidelines.

Public schools are mandated by law to provide certain services such as transportation to and from school, special education curriculum and more school-related recreational opportunities. The cost factor and location are two other reasons people often prefer public school.

While advisors do not need to involve themselves in the social factors which are involved in the private vs. public school debate for parents, the cost is a huge factor for some clients, and an advisor who can speak with knowledge about the choices involved would be helpful. This is especially true for advisors whose clientele is primarily local; a knowledge of school systems and private school ratings as well as the cost involved would promote the relationship between advisor and client. This is especially true for clients who have multiple children.

Spectrem’s research on parenting decisions explains the reality of the situation for parents is that while 37 percent of investors who do not yet have children plan to place their children in private school when the opportunity presents itself, only 27 percent of clients who have children did in fact send their children to private school.  

Cost clearly is one of the defining factors in the decision to place children in private school. As net worth of the investor increases, private school enrollment for their children increases, from under 20 percent of those investors with a net worth under $1 million to approximately 40 percent of investors with a net worth over $5 million.

College decisions are even more complex because there are more choices to make. There is the type of college to attend (public vs. private, academic vs. technical schooling), and the choices for funding are numerous. Advisors need to be well-aware and knowledgeable in the cost and financial details regarding 529 plans, grants, scholarships, and student loans. It is in college education funding where the balance between costs and net worth is most important to the decisions that are made.

In fact, it is in spending for college that affluent investors are most likely to curtail their own spending. When asked to place on a 100-point scale the need to curtail spending in order to meet family financial demands, investors rated their curtailing methods at 33.53, and no other spending decision related to parenting had as high a number. In fact, with the exception of those investors with a net worth over $15 million, spending on college education was the No. 1 area in which investors held back financially to some degree.



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Keywords: education, investors, advisors, public, private, Spectrem