The Real Cost of Schooling in Australia — and Why Families Need a Plan

If you’re feeling like “school costs” have quietly become a second mortgage, you’re not imagining it.

Futurity Investment Group’s Cost of Education Index modelling for children starting school in 2026 estimates the total cost over 13 years (fees plus the extras) at roughly:

• $113,594 for a government education (major cities)


• $247,174 for Catholic schooling (major cities)


• $369,594 for independent schooling (major cities)

These totals vary by city and region, and the “headline number” is only half the story—because for most families, the pressure comes from the add-ons as much as the tuition.

The “hidden costs” are doing most of the damage

When people think “education costs”, they often think fees. In practice, the budget blowouts typically come from the extras: uniforms, stationery/textbooks, devices, camps/excursions, transport, extracurricular activities, and tutoring.

This is why families can feel the squeeze even in schooling pathways where tuition is relatively low: the ongoing costs and the lumpy one-off costs keep arriving.

Turning big numbers into a workable budget

A useful first move is to translate a long-term total into a monthly target.

Example (major-city government schooling):
$113,594 over 13 years ≈ $728 per month (before any investment returns).

Of course, spending won’t be smooth—some years spike (new devices, senior years, camps). But a baseline monthly figure helps you plan proactively instead of reacting when an invoice lands.

A practical “two-bucket” system

1. Predictable costs (term/annual): fees/levies, uniforms, stationery, transport


2. Lumpy costs (spikes): devices, camps, excursions, tutoring blocks, sport/music tours, subject costs

Then automate it like any bill: a set transfer each payday into a dedicated education account (or investment).

Save, invest, or do both? Match the strategy to the timeline

The best approach depends on when you’ll need the money.

Short timeframe (0–3 years): prioritise certainty

If you’ll need funds soon, focus on options where the balance won’t bounce around:

• High-interest savings account


• Mortgage offset/redraw (where appropriate)


• Term deposits aligned to known payment dates (you can “ladder” deposits across fee cycles)

Medium to long timeframe (3–13+ years): consider diversified investing

If major costs are years away, investing can help you keep pace with rising education costs—while accepting that markets can fall in the short term:

• Diversified ETFs or managed funds using regular contributions (“dollar-cost averaging”)


• A common approach is to de-risk over time—gradually shifting toward cash/low-volatility options as high-fee years approach.

Education bonds: how they work and where they can fit

Education bonds are a specialised structure designed to help families save and invest for education costs. They’re typically discussed as an option when you want:

• a dedicated “education pool” that stays separate from everyday spending


• a long-term investment horizon (often many years)


• a structure that can be used to pay a range of education-related expenses (depending on the specific bond rules)

What to pay attention to

Education bonds can differ materially between providers, so it’s worth comparing:

• Fees and costs (administration fees, underlying investment fees, buy/sell spreads)


• Investment options (how diversified, how defensive/growth-heavy, and how much control you have)


• Access rules and flexibility (how and when withdrawals can be made; any limits or penalties)


• Tax treatment (education bonds have a distinct tax structure that can be beneficial in some circumstances but not all)


• Timeframe (how the bond is designed to be used over time, and what happens if plans change)

A practical way families use them

Where they’re used, it’s often in a “glide path” approach:

• build the balance during early years (long horizon)


• reduce risk as big fee years approach (short horizon)


• draw down progressively to cover education costs as they arise

This doesn’t replace budgeting—it complements it. The bond (or any investment strategy) works best when it’s supported by a clear plan for the predictable costs and the lumpy spikes.

A simple 5-step checklist families can use this week

1. Map your likely schooling path (sector + location) using current modelling as a guide.


2. Convert the total into a monthly target and automate transfers.


3. Split into two buckets (predictable vs lumpy costs).


4. Match your vehicle to the timeline (cash/offset for near-term; diversified investing for longer-term).


5. Review annually as costs, schools and circumstances change.

 

Next Steps

To find out more about how a financial adviser can help, speak to us to get you moving in the right direction.

 

Important information and disclaimer

The information provided in this document is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide.

FinPeak Advisers ABN 20 412 206 738 is a Corporate Authorised Representative No. 1249766 of Spark Advisers Australia Pty Ltd ABN 34 122 486 935 AFSL No. 458254 (a subsidiary of Spark FG ABN 15 621 553 786)