Children's education funding, without breaking the household plan.
Children's education funding is a larger number than most households plan for: private school from prep to Year 12, then a tertiary degree, can run into hundreds of thousands. The structure matters less than starting early, and starting in a way that does not derail the rest of the plan.
Start with the schedule, then choose the structure.
We start by mapping the fee schedule: school of choice, year of entry, expected annual fees, tertiary funding intent. Once the timeline is on paper, the right structure usually picks itself, and the result lands inside the wider financial plan.
For families on higher marginal rates with a long horizon, education bonds and investment bonds carry their weight, and the structures themselves sit inside the wider tax-effective investing conversation. For families still paying down a mortgage, there are usually better places for the next dollar than a separate education account; the trade-off is worked through on the debt management page.
Six ways to fund education.
Each has a fit. None is universally best. We compare on after-tax outcome, flexibility, and what happens if circumstances change.
Education bonds
Tax-paid investment structures designed for education costs. Tax-effective withdrawals when used for qualifying education expenses.
Investment bonds (10-year)
Tax paid inside the bond at the company rate. Tax-free in the holder's hands after ten years. Useful for parents on higher marginal rates.
Scholarship funds
Pooled education savings products with specific tax treatment for education withdrawals. We read the PDS before recommending.
Family trust
A discretionary trust can hold investments for the family with distribution flexibility across adult children later. Less useful for primary and secondary school funding.
Offset and home loan
For households still paying down a mortgage, keeping cash in offset can outperform a separate education account on an after-tax basis. We do the comparison.
Direct investment in parent's name
Simple, flexible, taxed at the parent's marginal rate. Sometimes the right answer once the structure overhead exceeds the saving.
The trap of locking up too much, too early.
Education funding is one of the few financial decisions that gets re-evaluated by the user. A child may take a scholarship, go to a different school, or choose a different tertiary path. Locking too much capital into a single-purpose structure leaves you stuck.
We tend to favour a blend: enough in a tax-effective structure to cover a baseline, and enough in flexible accounts to handle changes of plan. The fee schedule also needs a backstop, which is why income protection and life cover are part of the same education funding conversation.
- Annual fee schedule
- Fee inflation assumption
- Tertiary funding intent
- Scholarship sensitivity
- Second-child overlap
- Parental income changes
Frequently asked questions.
The earlier the better, because compounding does most of the work. Even a modest monthly contribution from birth makes Year 7 fees noticeably easier. We model the schedule against a realistic fee inflation rate.
Not always. They suit families committed to private school and on higher marginal rates. For households still carrying non-deductible home loan debt, paying down the mortgage and re-drawing later often produces a better after-tax outcome. We compare both.
Both are tax-paid structures. Investment bonds are more flexible because the funds do not have to be spent on education. Education bonds can offer specific tax features for qualifying education spend. The right answer depends on the certainty of the school decision.
Yes. Most education structures allow contributions from family members and the tax treatment follows the structure rather than the contributor. We work through estate planning implications where they matter.
Continue reading
- Financial planning overviewThe pillar page. How a Statement of Advice is delivered.
- Tax-effective investingInvestment bonds, family trusts, and where they fit.
- Debt managementWhere the home loan sits against education funding.
- Superannuation adviceThe contribution cap that still has priority for most households.
- Personal risk insuranceIncome protection that keeps the school fees on track.
Information on this page is general in nature. It does not take into account your personal objectives, financial situation, or needs. Read the relevant Product Disclosure Statement and consider whether personal advice is appropriate before acting on any information here.
Start an education funding plan.
An initial conversation is free and obligation-free. Bring the school shortlist and we will model the funding.