The price of top private schools is getting crazy. Sydney Grammar charges $31,419 a year, before extracurricular activities.

A single term at Sydney Grammar costs $7854 – about the same as a 39-day European holiday. What would offer a child a greater educational advantage?

The price of private education was not always so elevated. Around 20 years ago the price of a term at Sydney Grammar was similar to a shelf of reference books. But it has been rising at nearly six per cent a year – far ahead of inflation.

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Chart showing the relative costs of education at Sydney Grammar and St Catherine’s in Melbourne.

St Catherine’s School – a private girls’ school in Melbourne – has risen in lock-step (see right).

The price of top schools rises faster than average wages, which have gone up 3.7 per cent a year. It has risen faster even than the All Ordinaries Index.

The six per cent per year price rise is closer to the rising value of property. That suggests top schools are keeping an eye on the levels of wealth of prospective parents.

Australia vs the rest of the world

A top education in Australia may be very expensive, but it’s not as pricey as the most expensive schools overseas.

The costs of sending kids to private school may outweigh the benefits for some parents.

Attending Eton – where you may find yourself playing sports alongside members of the British royal family – costs £36,000 ($A76,000). Sports offered include something called ‘beagling’.

In the USA, The Lawrenceville School is the most expensive, costing $US47,840 ($A65,000). It offers a semester in the Bahamas where students can focus on tropical marine science.

Le Rosey in Switzerland costs £80,000 a year ($A170,000). With its main base by Lake Geneva it moves each winter to a campus in the Alps so students can ski.

These outliers show the only cap on private school fees is the wealth of parents. They will charge as much as they can.

Why do people think it’s worth it?

Is it all about social networking? About matching your kids with the “right” peers? A shameless display of Australia’s least egalitarian characteristics?

Maybe not.

Private school kids snag the best Year 12 scores and entry to the top universities.

In Victoria, 80 per cent of the top 100 schools were independent schools and many of the rest are selective high schools, and in NSW the result is almost as pronounced.

Why? Parents who care about academic results are often pulling their kids out of the public system as the government underfunds it.

The Gonski report called for needs-based funding for schools. But Gonski is a dead mullet floating on our political pond. Parents who care about public education may still vote with their feet and take their kids to a grammar school.

The benefits seem real.

Independent schools have higher Year 12 retention rates than government schools: 94 per cent versus 75 per cent in 2011. And, of course, higher university admission scores.

Higher marks matter. Going to university delivers massive benefits, pumping your expected lifetime earnings to $2.9 million (see right).

Going to a top uni delivers a small but significant six per cent increase in lifetime earnings.

That is probably why the highest income households spend the most on education (see right: school fee spending by income chart).

But the whole thing could be a façade. The data shows that kids from socio-economically advantaged backgrounds do better at school no matter what kind of school it is. The very obvious advantage of going to a private school could be purely a statistical quirk – a side-effect of the kind of kids who attend.

This is important to recognise because the sacrifices parents make to send their kids to private schools are real. The extra work required to afford the fees may mean kids don’t see their parents as much.

If the advantages of private school are not as real as they seem, those parents are sacrificing in vain.

There are signs some parents are starting to realise this (see right).

Private education has been growing faster than government for a long time. But in recent years, government schools are mounting a comeback.

Could the price of private education have finally got too high for people to bear?