Private education has always been a popular option in the New Orleans area – and attendance rates have only increased in the last few years. In fact, 26.1% of students in New Orleans were enrolled in private schools for the 2022-23 school year, up from 25.4% in 2019.
I know my wife and I have had many conversations about the wisest ways to fund private school education for our kids – and part of that is figuring out how to do that in a tax-savvy way.
If you’re unsure that you’re doing all you can do to take advantage of any breaks you can get along the way, here are a few tips and strategies you might consider.
Tap Into a 529 Plan
A 529 plan is a fantastic way to save for education expenses, including private school tuition. The best part? You can now use up to $10,000 per year per student for K-12 tuition. Here are a few of the benefits:
- Tax-free growth: Money in a 529 plan grows tax-free when used for qualified education expenses.
- State tax perks: Many states offer deductions or credits for 529 plan contributions.
- Anyone can contribute: Parents, grandparents, and even generous aunts and uncles can chip in!
Look Into a Coverdell Education Savings Account (ESA)
A Coverdell ESA is another great way to save for education costs. While the contribution limit is $2,000 per year per child, it can be used for a wide range of expenses like books, tutoring, and supplies—something a 529 plan doesn’t cover.
Use a Custodial Account (UGMA/UTMA)
If you want flexibility, a UGMA or UTMA account lets you save for your child’s future, including education. Keep in mind that the money belongs to your child once they reach adulthood, and there may be tax implications on investment earnings.
Take Advantage of Employer Benefits
Some employers offer tuition assistance programs, so check with your HR department to see if this is an option. You might also have access to a flexible spending account (FSA) to help with education-related costs.
Get Help from Grandparents and Other Family Members
Relatives can pitch in through smart gifting strategies:
- Annual Gift Tax Exclusion: Family members can gift up to $19,000 per year (as of 2025) without tax consequences.
- Direct Tuition Payments: If grandparents pay the school directly, it doesn’t count as a taxable gift – making it a win-win.
Take Advantage of Louisiana’s Tuition Deduction
Louisiana allows a state tax deduction of up to $5,000 per child per year for private school tuition payments, reducing taxable income for parents paying tuition out-of-pocket.
Consider a Home Equity Loan or HELOC
If you have significant home equity, you might be able to use a home equity loan or line of credit (HELOC) to help with tuition costs. Just be mindful of the risks and whether the interest will be tax-deductible.
When people think of education funding, they often assume it’s for the college years. However, in New Orleans, funding education often starts much earlier than that. Keep in mind that making educated decisions about how to get your kids through school is part of the overall financial planning process.
If this has been on your mind, or you’re wondering if you’re doing everything possible to save money along the way, we’re here to answer your questions. Believe me, we’ve been there!
CLICK HERE to make an appointment.