Parents Are Borrowing To Educate Their Children

An increasing amount of parents are applying for bank loans to put their children through private school, new figures show. Spending on private school fess reached an estimated 7.9 billion pounds last year, compared to 6.9 billion pounds in the year 2001-2002.

Over the past 12 months, Sainsbury's Bank has reported that it has seen a 38 per cent rise in applications for loans to cover the cost of independent school fees. During the last ten years fees for private schools have risen by approximately 50 per cent.

The loans manager at Sainsbury's Bank says: 'Around 620,000 children are now privately educated in schools, which are consistently charging more in fees.''We expect to see a growing number of parents taking out loans to help pay for their children's education. Those parents doing this need to make sure that they shop around and find a competitive loan rate.'

The bank's figures show that families in London typically spent the most on education fees, with an average of 577 pounds per year. Those in the East Midlands spent the least, averaging 140 pounds per year. These average figures were calculated across all households. Those with no children and those without children in private education were included in the figures.

However, figures from the Independent Schools Council show that average fees for a boys boarding school are now around 21 thousand 600 pounds a year. The figure for girls is 20 thousand 400 pounds. Education for pre preparatory private education, which is for two to seven year olds, is between 1,000 and 1500 pounds per term.

Fee fixing allegations - The annual rise in these fees came under the public glare recently after 50 of the country's leading public schools had to pay out 2.5 million pounds after an investigation, by the Office of Fair Trading, into alleged fee fixing. It was found that schools including Eton, Winchester, Harrow and Cheltenham Ladies' College will each pay 10,000 pounds and make payments averaging 60,000 pounds to a new educational charity. The schools had admitted that for three years details about the boarding and day fees they were intending to charge were exchanged.

Meanwhile, parents are making huge financial sacrifices, to send their children to private schools due to growing disillusionment with the state sector. They are cancelling family holidays and juggling two or three jobs to fund a private education.

Hundreds of thousands of postcodes collected from 900 ISC member schools have been analysed. It found nearly a quarter of ISC pupils (23.8 per cent) come from average or below average backgrounds and 43,000 pupils (9.3 per cent) live in postcodes where household income is below the national average. Another survey by ING Direct recently found that 44 per cent of parents are putting cash aside specifically for their children's education, compared to just 12 per cent in previous years.

A spokesman for the ISC said yesterday: 'The fact that many parents take out loans - and thus pay interest - to cover school fees reflects the importance some parents place upon high quality education. 'Twenty-five per cent of independent school parents have average or below average incomes and many are foregoing exotic holidays or new cars to pay for an independent education for their children.'

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