Would private schools expect us to remortgage before offering a bursary?

[Tootandcomeinagain]

Hi - seen a lot here about bursaries and wondered if anyone has remortgaged for school fees - we live in a 700K home (all paid off) in London. Salaries 90K gross. Potential school fees are 12K a term so 72K a year for 2. Would we qualify for a part bursary or would we be expected to remortgage? Do they look at the home first? Id be interested in any bursar views as there have been a few posting?

I don’t know if they would expect you to remortgage, but they would take into account that you have a large asset and that will likely count against you.

How old are you? You might not be able to get much of a mortgage but they would expect you to use assets before assisting

I’m not an expert but I believe that parents applying for fee assistance are expected to use capital savings, investments, and equity in their home before financial aid is granted. They will look at all that.

Yes in my experience, having that asset would be taken into account. I haven't done it myself but helped a friend with an application and it was very detailed/ invasive and definitely included houses and mortgage amounts.

No idea how much it varies school to school though.

if your children are not in GCSE or A level years, just move to state. If you have to remortgage for school fees you can’t afford it.

How are you even thinking about private school for two kids on 90k gross combined?? Or is that a typo? 90 net each would be more feasible

I think it’s very common to remortgage for school fees.

Given you have no mortgage currently, This is quite an affordable way to access the education you want.

Individual schools will have their own policies as to what they will accept.

I would challenge if using such expensive schools is really the best option for you and your family given your income level. What’s the motivation? What other sacrifices / opportunities will you lose for you and them?

i just re-read your OP, you say potential fees? So you aren’t even in the school yet? Honestly stay where you are.

It will depend on the school but I spoke to the school bursary team of a very well endowed school, and they suggested that we would not need to use our equity (we have a £400k mortgage on a £750k house) but if we had paid off the mortgage, or had a million pounds of equity, we would. They will also look at the size of your house for your needs and compared to the local area - if you're in a £700k home in London, that is very modest. I know of a friend who was explicitly refused a bursary because she had a £800k house with no mortgage, but that was partly because it was a five bed house for just her and her son.

You can but ask - be honest, and pick up the phone. Although the more they like your child, the more generous they may be. The bursary applications will ask if there is a reason you can't use the equity - e.g. "there are no houses in the right area which are suitable for our needs at a lower price, and we would be unable to afford the mortgage payments on a [£x] mortgage.

You seem to be in a relatively unusual situation where you are mortgage free but looking at private school fees on a relatively low household income. Most people with that income wouldn’t be considering private school at all. And in London you should have decent state options. If you feel that strongly about going private, then the obvious way to fund it is to release the significant equity in your house.

Is there a typo in your OP? £90k gross salary and £72k a year fees, and you’re hoping to qualify for a part bursary? Surely even with a part bursary this is completely unaffordable?

Thanks all - really helpful to get this advice. It's not a typo unfortunately! For context - currently at a prep which is much lower fee-wise with a partial bursary. Looking at another school but its not only higher fees but also looking unlikely to get a bursary at all due to the home (which i was questioning here). Our thoughts were would we potentially get a partial bursary due to salary constraints or could they just say an outright no due to the property.

Also - i would add we are 50 so would that make a difference in terms of releasing equity

If you do want to remortgage you could probably got to 70 without too much trouble.

I work in a bursary department, we would definitely expect you to either remortgage or to sell up and move to a cheaper home (appreciate in London that’s unlikely to be possible, here it would be).

We don’t have a big endowment, so bursaries are basically being paid by the money we get in from the fee paying families. Bluntly you can’t sit on £700k of assets while asking the other parents to pay your fees, plenty of the other parents are using their own assets to pay the fees and are not super wealthy.

@Okdokeyartichoke thats really helpful, we just wanted to understand if its a hard no, so sounds like we will definitely need to remortage. It's quite a wealthy school so we had hoped some flexibility

If they have a big endowment there may be more flexibility, but in general bursaries are under a lot of pressure right now. We haven’t offered any at all to new pupils this year, we can only provide bursaries to help the families who were already at the school but have been hit by the VAT, so that their kids can finish their education with us. From talking to colleagues across the sector I understand that’s really common.

@Tootandcomeinagain we were in a similar situation - applied for a bursary at a school with 10K/term fees, had similar income and house value though the house was still mortgaged (we had around 2/3 equity when we applied). The school won't tell you that you must remortgage, but they will take assets into account when calculating a bursary offer and then it will be up to you to decide how to make it work financially.

We were offered a sizeable bursary, which we're extremely grateful for, but it still wasn't enough to manage out of earned income so we chose to remortgage.

My DCs London private school is well known for being generous with financial assistance. They won't even look at bursary assistance if the household income is above £85k.

What an astonishing waste of money...

You can't afford it, even with a bursary. It will hugely upend your life, and your children will enter uni and home ownership stages with parents who are just 'getting by', when their peers are bought homes for wedding presents. It happens. A lot.

I'd save and set them up for life at 18...

I wouldn't waste it on a private school education which employers increasingly see as an unfair advantage, even university admission depts, when, you haven't got the money for the real 'leg up' which the privileged increasingly rely on to get ahead of their peers... Uni without loans and a home without decades of saving, often missing the boat.

Private schools are a mixed bag anyway. They are only as good as their staff, especially class teachers, and they are chopping and changing more than ever now due to low salaries and staff retention problems... Easy to get a 'dud' class teacher for private money... When you could have got a superstar nqt in a state school for free...

What I'm saying is the high fees guarantee less and less these days. Loads of bullying still in private schools, lots of unhappy, lonely children. Don't be fooled by the flashy astro pitch and frilly headmasters wife... Doesn't mean a thing!

I went to a private school and would never send my children there for financial reasons.

£30000/year fees when saved into investments growing at 3% real terms would give your child around £510000 in todays money at age 18. At age 30 assuming you put no more money in after age 18, they may have £730000 in today's money. That may save them a further £700000 in mortgage interest on their house over their lifetime.

Putting private school money into investments may save them ~£1.1 million equivalent over their lifetime (when you factor in inflation eroding mortgage debt). I'm aware that parents choose private education for many reasons including neurodivergence etc. but if it's for career prospects/salary, please tell me how many stable and secure jobs inflate salary by £57000 per year pre-tax from age 23 to the age of 55 (i.e. when they would have paid off their mortgage)? That £57000 annually is the boost in salary they would need to compensate for the loss of that £730000 age 30.

When I employ people I look at exam grades relevant to the position and their suitability for the job. I couldn't care less if they went to Eton or a comp in Moss Side.

That is your perspective - not everyone thinks the same way.

Personally, I value the journey over the destination. To me, "setting my child up for life at 18" means giving them an education that enables them to develop their talents and abilities and grow into the best version of themselves so that they have knowledge, skills and ambition to take into adult life, not just handing them a pile of money.

We chose to remortgage to take up a bursary offer, not because we assumed it would "buy" better grades, university entry, or wealthy contacts, but because we knew it would give our DC academic and extracurricular opportunities that mattered to them that were simply not available in the state sector. Yes, that means we are not in as good a financial position as we might otherwise have been. Yes, the annual financial scrutiny of bursary renewal is anxiety-provoking and intrusive. No, I don't regret our decision for a moment.

You are in an incredibly lucky position to be mortgage free. Don’t remortgage just to pay school fees. Use the spare money for extra curricula activities instead.

This is madness. Our household income is £180k and we aren’t even considering private school for our children (even when we had two, we have three now). You need to be earning really good money to be a private school family