Parents Using Personal Loans to Cover Education Costs

Mon, 07 Jun 2010

A new survey from Sainsburys Finance has revealed £37 million of personal loans were obtained last year by parents to pay for their children’s education . 4,400 personal loans were taken out for this purpose last year, leaving the average amount borrowed in order to pay for school fees or university fees at £8,500. The figures also reveal that parents are increasingly taking out loans to fund the cost of sending their children to private school, with 1,100 loans obtained for this purpose costing a total of £12.25 million. This trend is unsurprising given that the average private school fee continues to increase, with the past year seeing a 4 per cent increase to £4,186 on average each year.

Meanwhile, 1,900 of the loans were taken out for university or college fees, while the remaining loans – totalling £11.26 million – were taken out by parents to cover the costs of school clothing, school trips and books.

With banks and lenders increasing interest rates significantly over the past two years, these loans are likely to be increasingly difficult to manage for parents, with those who have taken loans out for this purpose in the past likely to have to do so as the annual costs of education continue.
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