An increasing number of middle class families are having to take out loans as parents look to fund their children’s’ education. New research from Sainsbury’s Finance estimates that up to 18,000 people took out loans last year to pay for private education, and has predicted that figure to rise during 2008 as the credit crunch continues to erode people’s finances and the cost of living continues to rise.
The 18,000 people who borrowed from Sainsbury’s Finance last year for such a purpose took out a total of £165 million, meaning the average loan stood at over £9,000. However, that figure still isn’t enough to pay for the average independent school in the UK, with the Independent Schools Council revealing that average annual school fees are £11,250. That figure does, however, include boarding schools, which cost over £22,000 each per year on average, compared with independent day schools which cost just over £9,000 a year each on average. The ISC also revealed that school fees rose by 6.2 per cent in the last year, more than double the official rate of inflation .
Typically, families struggling for cash would remortgage or draw against the equity in their home, though with the property market declining, personal loans have become increasingly popular.
More Families Taking Out Loans to Cover School Fees
Tue, 10 Jun 2008
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