Different Ways of Funding Schooling Costs for Children

Today, education is of utmost importance as 4 out of 5 people aspire to be educated. A simple Google search would show the many articles and blogs written on the importance of education. The urge to fight illiteracy and lack of education worldwide has led to the creation of foundations, programs, events and even the awarding of scholarships to many students.


According to ABS data, for every AU$1 lost in university tuition fees, another AU$1.15 is lost in the larger economy owing to overseas student expenditure, demonstrating how significant changes in the education sector may be for Australia. This is unsurprising given that the country is home to twelve of the world’s best universities, according to the Times Higher Education World University Rankings.


Importance of Education

1.   Creation of job opportunities

When applying for a job, one of the most basic requirements is the need for education up to a certain level. It’s not rocket science that in an economic turmoil, searching for a job is not easy. Hundreds, if not thousands of people are also applying for the same role, so your education is what makes you stand out.


2.   Develop problem-solving skills

Problems arise in every stage of life. The problems of a child would differ from that of a teenager and an adult. With the help of proper education, you can make logical and critical thinking to solve these problems as they come.


3.   Securing a higher and steady income

Although this isn’t always the case, educated people often get higher-paying incomes. For example, most employers reserve higher positions with higher-paying incomes for masters or PhD holders, leaving BSc holders to a lesser income.


4.   Living a respectable and prosperous life

Educated folks are often respected in society. They have distinguished reputations and are able to secure jobs as well as climb up the employment ladder with ease. Due to getting high paying income jobs, educated folks often get to live lives of comfort and ease, being able to afford things easily without living from hand to mouth.


If these many benefits are embedded in education then what happens when funding is difficult?


A survey conducted by the Australia Scholarship Group (AGS) revealed the price of funding an education at different levels in Australia – in government, catholic and independent sectors. The survey found that for a private education, families will incur an expense close to half a million dollars.


How then can families fund this schooling cost for children?


Different ways of Funding Schooling Costs for Children

1.   Investment bonds

Large fund managers typically provide them as a sort of managed investment. Though the specifics, such as fees and returns, may vary, they are all similar.


The bond’s underlying investments generate revenue that is taxed at a business rate of 30%, which is paid by the investment company over the bond’s term. If it is held for about ten years, the earnings are tax-paid and returned to the investor. This is beneficial to parents whose marginal tax rate is higher than 30%. It’s important to understand that insurance bonds aren’t just for people who have high earnings.


2.   Education bonds

It’s also referred to as education savings. Usually, the ASG and Australian Unity have these scholarship schemes available. They’re similar to investment bonds in that they work in the same way. The fund is taxed at 30% on its investment gains, but when money is pulled down to pay for school expenses, the fund can claim this 30% tax back, saving parents money. However, having a flexible savings approach is recommended to minimize rigidity in changes.


3.   Home loan

Paying school fees is a challenge for many parents, especially when they’re attempting to pay off a mortgage. So it might make sense to combine the two, utilizing a home loan to assist pay for education via an offset account or by making extra repayments and then redrawing cash to pay for school expenditures.



Although surveys reveal figures that are quite discouraging, through investment bonds, education bonds and home loans, you can still fund schooling costs for children.

Comments are closed.