Ballarat Grammar, Ballarat Clarendon College and other independent schools could lose millions in federal cash under a new funding model.
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The two are among 11 independent schools in regional communities across the state, including Bacchus Marsh Grammar and Maryborough's Highview College, who stand to be short-changed up to $100 million over the next decade as a result of the new funding formula which measures the median income of a school community based on parents' tax records.
According to the newly-formed Coalition for Regional Independent Schools, most established regional independent schools will each be stripped of more than a million dollars a year under this new model, forcing them to cut programs, increase fees and, in some instances, potentially close their doors.
Previous funding arrangements assessed a school's socioeconomic status index, which was based on education levels, occupation and median income of the area parents lived according to the Census of Population and Housing.
But the current proposal before parliament is based on tax records of parents and only measures the median income of a school community.
Coalition chair Stephen Higgs said adoption of the new funding system could hurt many parents, students and families.
"We support the notion that funding of schools should be based on parents' capacity to contribute what they can pay in fees ... but just taking one measure like the median is a very unsatisfactory way of doing it," he said.
"In Melbourne you've got high-fee schools, medium-fee schools and low-fee schools and parents choose the school according to what they can afford but if you go to a place like Hamilton there's one independent school and that's the only choice if you want independent schooling.
"They attract a much broader range of incomes at the school than Melbourne schools. At regional schools the fees are substantially lower than comparative schools in Melbourne which is an indication of parents' capacity to contribute.
"If you are allocating according to a median middle point then you are allocating according to what the top half of the population can afford, not taking in to account the lower part."
Ballarat Clarendon College principal David Shepherd expressed his concern about the changes in a letter to parents.
"We are concerned about the long-term uncertainty and volatility of the proposed funding model, its impact on our ability to effectively plan and budget and its bearing on the structure of school fees and potential fee increases," he wrote.
Mr Higgs said schools would be left with a choice between increasing fees or cutting programs if the proposed changes are fully adopted, as planned, by 2022.
"The other aspect of this which hasn't been thought through properly is if schools increase fees, lower income parents will be forced out, so the median income will increase which means they will get less government funding per head, so more parents will drop out which sets up a vicious cycle."
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