Parents with lower income receive more relief from fee increases in 2023

Average school fees have gone up by 4.49% this year compared to 2.9% in 2022, which is under the current inflation rate of 7.3%. Our annual 2023 School Fees Report analysed fees at 635 schools and found that those which have families with lower incomes had the smallest average fee increase this year.

Fee increases adjust to the growing cost of living

The return to normal after disruptions over the past couple of years and higher inflation in the economy has led to a range of rising costs for both schools and families. The implication of inflation above 7% is the elevated operating and maintenance costs that schools are experiencing, including larger teacher salaries which make up the biggest portion of their expenses.

While schools have been forced to raise fees to address this, many have also attempted to balance the needs of their parent community. Many schools have instead recognised the cost of living pressures on families and have chosen to minimise fee increases where possible. We found that 85% of schools increased their fees below inflation, which is up from 56% in 2022.

Across the different fee tiers, we also found that schools with annual fees of below $10,000 had a lower average fee increase compared to their higher-fee counterparts.

Changes to government funding have been a factor

Our analysis found a correlation between the demographic of a school’s parent community with the average fee increase. Under the Federal Government’s Quality Schools Package, each school is given a Capacity to Contribute (CTC) score which measures a school community’s capacity to contribute to the ongoing costs of running the school.

The CTC score is a key factor in determining the amount of base recurrent funding each school attracts from the Australian Government, where schools with a score below 100 typically attract more government funding than those above 100. As part of the transition to the new funding model from 2023 onwards, all school’s CTC scores are set according to the Direct Measure of Income (DMI) which is based on the median income of parents or guardians.

This new method appears to be working as intended, with schools that have CTC scores below 100 with families on lower median incomes had smaller average fee increases of below 3.5% compared with schools above 100 where parent incomes are higher.

As schools with very high CTC scores have traditionally received less funding on a per student basis in the past, they are less impacted by the recent changes and have increased their fees at a slightly lower rate.

School fees varied between states

The average fee increase varied between states with the ACT and Queensland recording higher increases of above 5%, while for the second year running South Australia recorded the lowest average fee increase at 1.94%.

NSW came close to matching Victoria as the state with the highest fee school, with the highest fee in both states reaching above $46,000 in 2023, with an increasing number of schools raising their fees above the $40,000 mark.

While the highest fee schools in other states also saw fee increases, they are still significantly below NSW and Victoria. The top fee schools in Western Australia and Queensland is $15,000 less than the two most populous states at around $31,000, while South Australia is just under $30,000.

These higher fee schools often attract more attention but they make up a very small portion of the non-government school sector in Australia. The median fee across all states is between $8,900 and $13,270, with the majority of students attending low to middle fee schools.

Key Trends in each state

NSW

Average school fees in NSW grew by 4.41% which was a step up from 3.04% in 2022. There was a East-West divide across Sydney, with the average fee increase in Western Sydney much lower than on the coast.

Victoria

Victorians have seen a 4.60% increase in average school fees which is up from 2.9% last year. Across the state, Melbourne’s West had the highest average fee increase at 5.86%.

Queensland

Queensland has led the nation with an average school fee increase of 5.59%, up from 3.56% in 2022. The state’s fee increases were 1% above the national average, and Brisbane City had the highest average fee increase of above 8%.

Western Australia

School fees increased by 3.98% in Western Australia which rose from 2.79% in 2022. The state saw a West-East divide as schools away from the coast had smaller average increases to their school fees compared to their Western counterparts.

South Australia

South Australia recorded the lowest average fee increase in the country for the second year running at 1.94% in 2022. While up from 0.91% last year, it is significantly lower than the national average of 4.59%

Download the full report

Our annual School Fees Report is the largest analysis of school fees in Australia where we take a closer look at the changing cost of tuition and boarding fees at a national and federal level so that families can better prepare their budgets for the changes ahead.

To download the full report and see our full analysis visit edstart.com.au/report.

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