Can you actually afford private school? A liquidity model for high-income families

1. You're not buying tuition. You're signing a 13-year cash-flow obligation.

Frame it the way a CFO would frame any long-dated commitment: not as a price, but as a schedule of required cash outflows. One child at today's tuition is a number. Two or three children, starting years apart, with tuition compounding annually, is a curve — and the curve peaks in the overlap years, exactly when your oldest is in high school and your youngest is in elementary.

Consider a concrete example. Two kids. Tuition is $35,000 per student today. Oldest starts in 2 years; the kids are 2 years apart; tuition inflates at 4% a year:

Notice what the sticker price never told you: the decision isn't "$35K a year." It's "$1.3M over 15 calendar years, peaking at $121K." Those are different decisions.

2. Tuition inflation is the quiet multiplier

Private K-12 tuition has outrun general inflation for decades. The Bureau of Labor Statistics found elementary and high school tuition and fees rose 4.3% from August 2025 to August 2026 (vs. 3.4% overall inflation), climbed 41.8% between July 2011 and July 2021, and rose another 8.6% from February 2020 to February 2023. In New York City, 15 private schools raised tuition an average of 4.7% between the 2025–26 and 2026–27 school years alone.

At 4% compounding, today's $35,000 tuition is about $61,000 in year 14. At 5%, it's $69,000. Small differences in the inflation assumption move the lifetime number by six figures — which is why the calculator below lets you set it yourself instead of hiding it.

3. Your income in year nine probably doesn't look like today's

High-income households have volatile income: RSUs vest in lumps, bonuses get cut, one spouse steps back, a job change resets comp. The families who get hurt aren't the ones who couldn't afford year one — they're the ones who could afford year one and got blindsided in year nine.

So don't model one income path. Model two: your base case, and a stress case — say, income 25% lower every year (the RSU-heavy version of this: your equity comp goes to zero and stays there). If the tuition curve is comfortable in the base case and survivable in the stress case, you have a decision. If it only works in the base case, you have a hope.

4. The 2026 529 change actually matters now

Under the One Big Beautiful Bill Act (OBBBA §70413), starting with tax years beginning January 1, 2026, the federal annual limit for K-12 529 withdrawals doubled from $10,000 to $20,000 per student. The law also expanded qualifying K-12 expenses beyond tuition to include curriculum and books, tutoring, standardized test fees, dual-enrollment costs, and educational therapies for distributions after July 4, 2025.

Three caveats that matter for your model:

• State conformity varies. Federal qualification does not automatically mean your state treats the withdrawal as tax-free. Check your state's rules before assuming the benefit.
• $20,000 is a cap, not a target. If tuition is $35,000, the 529 covers $20,000 tax-free per student per year; the rest comes from cash flow or taxable funds.
• Don't overfund blindly. Non-qualified withdrawals face income tax on earnings plus a 10% additional tax. (One escape hatch: SECURE 2.0 allows up to $35,000 lifetime in 529-to-Roth IRA rollovers once the account is 15+ years old.)

The calculator below optionally models 529 funding per child against that $20,000/year/student cap, so you can see exactly how much of the curve it absorbs — and how much stays on your cash flow.

5. 529 vs. taxable: fund the curve, not the account

The right question isn't "how much should we put in the 529?" It's "which years of the tuition curve should the 529 cover?" Because withdrawals are capped annually, a 529 is most valuable aimed at the peak overlap years, when two or three tuitions stack. Contributions made early compound longest — but every dollar you contribute is a dollar locked into education use (plus the Roth-rollover escape hatch). Taxable funds stay flexible and cover the above-cap remainder. Most families want both, sized deliberately.

6. The guardrails: three tests before you enroll

Our rules of thumb — deliberately conservative, and rules of thumb, not advice:

If all three are green, the commitment looks affordable under stress. If any is red, you're signing a contract your cash flow can't survive without everything going right — which is precisely when private school stops being a choice and starts being a trap.

7. What this model doesn't do

• Financial aid. Many schools discount aggressively — some now offer aid to households earning $500K+. If you expect aid, model the net tuition, not the sticker.
• Sibling discounts. Some schools offer 5–10% for second/third children. Add it if yours does.
• Taxes beyond the 529. State treatment, AMT, and deduction interactions are out of scope — talk to your CPA.
• The value question. This model answers "can we afford it," not "is it worth it." Different spreadsheet.

Try it: the free mini-calculator

Enter your numbers. The calculator builds the full tuition curve — every calendar year, both income scenarios — and runs the three guardrails. All math happens in your browser; nothing is sent anywhere.