Shady Side began in 1883 as a single-room school in Pittsburgh's Shadyside neighborhood, set up by early steelmaking figures to train the city's future leaders. The area got its name from the shaded lanes that line the streets.
Those one-room days are long gone. The school's four campuses now cover 189 acres and serve roughly 1,260 students in pre-K through grade 12, along with more than 60 sports teams.
Now it is borrowing like a small city. Shady Side is raising $30 million through municipal bonds, which are loans from investors to a public authority.
The McCandless Industrial Development Authority will issue the bonds: $25 million tax-exempt and $5 million taxable. The tax-exempt part means investors do not pay federal income tax on the interest they earn.
The $5 million taxable piece is a more standard arrangement, with taxes owed on the interest. The bonds come with the school's general-obligation backing, which is a promise to repay the debt from its overall budget.
S&P Global Ratings gave the bonds an A rating, and the sale is set for Wednesday. What will the money buy?
School officials did not respond to questions about the plan.
Borrowing through a local authority is standard for private schools that want access to the tax-exempt market. The McCandless authority issues the bonds while Shady Side keeps responsibility for repayment, a structure that lets investors receive tax-free interest on the $25 million piece. The A rating from S&P Global Ratings underscores the school's credit strength as it takes on the new debt.
Private schools have been using the muni market a lot more this year.
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Much of this borrowing is about staying competitive. Schools are upgrading to stay in the race for students.
Shady Side's enrollment picture has two sides. Over the last five years, Shady Side has seen roughly 6% of its students leave each year, while about 230 new students have arrived annually, keeping total enrollment on the rise.
Total enrollment is up 24% since fall 2019. Between financial years 2020 and 2025, the number of full-tuition students who get no financial aid rose 39%.
The school is aiming higher, with targets of 1,280 students next year and 1,327 by fall 2030.
Tuition is rising faster than usual, especially for the youngest students. Pre-K and kindergarten families will see tuition climb roughly 8% in the coming school year, reaching more than $26,000.
First through fifth grade will cost $31,700 next year, after a 6% increase. Typical annual increases at private schools run 3-5%, so these moves stand out.
High school costs the most. Day students pay $67,300 a year, and boarders pay $71,300.
Those numbers are well above the national average private school tuition of $50,000. In New York City, fees are approaching $70,000, which puts Shady Side in a big-city price range.
A pricing study shared with bond investors says the school can charge more because it is a market leader among Pittsburgh independent schools.
For families with two kids, those tuition bills add up fast.
This deal is a reminder that the muni market is not just for roads and bridges. Schools borrow in it too, and investors earn interest while the school repays the debt.
If you own a bond fund, you may already hold pieces of deals like this one. The A rating suggests Shady Side looks like a dependable borrower, and the bond market is betting that families will keep paying up.
For families, the bigger story is the direction of private school costs. Schools that want to compete are borrowing to build the things families expect, like new buildings and better sports facilities.
Tuition is climbing to help pay for it all. That is good for a school's future but a growing expense for parents.
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