Credit Crunch

Credit crunch hits private schools

A leading finance expert has reported that many private schools are struggling to survive as pupil numbers fall, primarily because increasingly cash-strapped families are finding it hard to pay for private schooling during the credit crunch.

The cost of a private education has risen by 40% in five years and leading accountant Noble Hanlon has warned that schools face closure if they don’t maintain pupil numbers.

Mr Hanlon said, ‘Prep schools as well as senior schools are already experiencing parental difficulties in the payment of fees since the beginning of this term, when the effects of the credit crunch and banking crisis took hold.’

Parents are reportedly doing anything they can to keep their children in private schools, including remortgaging or downsizing their homes but while schools can call on special funds to aid struggling parents, they cannot support them for long, according to Mr Hanlon.

He added that previous recession figures suggest that it takes two to three years for the full impact of a financial downturn to fully register in pupil numbers.

‘Come next autumn parents have to make the decision whether their children will transfer to senior school - a five year commitment,’ he said.

‘Once you put a child into the system you don’t really want to interrupt that flow of education unless you are forced to.’

Dr Anthony Seldon, headmaster of Wellington College, said, ‘However deep the recession, parents will fight very hard to keep their children at independent schools.

‘They will re-mortgage their houses, they will go to their own parents for financial support, they will forego holidays, they will sell assets, they will even downsize houses. They will do anything they can to keep children at these schools.’