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While the effect of boarding school on students are often straightforward, its unintended consequences are poorly understood and less being tested. Using a nationally representative data from CFPS, this paper investigated the impact of boarding school on educational expenditures. The results confirm that: 1) Boarding school substantially exacerbates the household expenditures on children’s education, and further causes the inequality of educational expenditures at the county level. 2) The positive impacts on expenditures are more significant and extensive in urban household with high-educated and high-income, and the inequality of educational expenditures tends to be more intensive in counties from Western China. Thus, policy solely aimed at widely popularizing boarding school, may lead to the arms race in educational expenditures.