In the present research, the impact of increase in the price of educational goods and services on welfare of Iranian urban households was examined. To this end, CV and EV indices were used and the equivalent amount of money to compensate for welfare loss of urban households was calculated. In addition, to estimate LES demand system, households were classified into ten income groups from 2007 to 2011. CV and EV indexes showed that the welfare level of all income groups decreased with the increase in the price of public education. Families which earn high income lost more compared to households on low income.  Of course, the lost income among the privileged households, despite having been higher, is proportionally less than that of the lower income families. In other words, the higher lost income is due to the price increase in public education relative to the low income households, on the one hand, and the persistence of injustice in the distribution of educational opportunities.