In this era of privatization and resulting commercialization of education at all levels, it is of paramount of importance to analyse the cost of education incurred to a student (or his/her parents) for his/her schooling. There is a public perception that higher one pays the amount of fees, better is likely to be his/her education and thereby, ultimately his/her academic achievement. This perception becomes more pronounced in case of self-financed schools as well as in case of private-aided schools when the Government wants to raise the fees. The present paper, thus attempts to analyse whether the academic achievement of students differs on the basis of school types, viz., private-unaided, private-aided and municipal schools in Greater Mumbai. In this attempt, it is also necessary to compute and compare the private cost of education per annum in private-unaided, private-aided and municipal schools. Cost analysis in education provides useful guide to education planners on the actual cost involved in producing a graduate at any level of education. It indeed, gives an insight into the pattern of educational expenditures. Cost analysis is often used to identify possible cost reduction. The need for cost reducing measures and more generally for policies towards cost effectiveness. This is necessary as the private cost of education is likely to be the lowest in municipal schools as the local government bears the entire cost of education and the highest in private-unaided schools. The next logical step is to ascertain whether the academic achievement of students differs on the basis of school types after adjusting for students' private cost of education per annum. This is essential so as to find out whether it is the private cost of education per annum incurred by the student or the characteristics of the school and the classroom processes matter and make the difference in the academic achievement of the students.