Fascinating. In my country private schools will get almost the same amount from the government per pupil as public schools, provided they keep their fees at a reasonable level and comply with certain quality standards. Same with private hospitals, btw. They will get the same amount per patient as it would cost to heal them in a public hospital. There is real competition between the private and public sectors in areas where the population is dense enough, for specialized services like heart surgery, and for boarding schools. If the private sector can provide a better service at a lower cost, the private sector will win. For some reason the private alternatives almost always cost more. I.e. the sum of user payment and public refund is higher than the cost of the same in the public sector.
Subsidies tend to push the price up. This can be easily seen in the US higher education system but also in things like digital converter boxes which the government subsidized by $40 and what should have been a $20 box was being sold for $60.