Companies see increase in Queensland parents putting school fees on credit

Lenders, brokers and start-up companies are reporting a surge in parents looking to fund their kids’ tuition through credit.

QUEENSLAND parents are being forced to take out loans to fund their kids’ private school tuition fees with one lender doubling its customer base in the past year.

Experts say the combination of record low interest rates and rising cost-of-living pressures have led to a dramatic rise in families turning to loans to fund education costs.

Some of Brisbane’s most exclusive institutions including Brisbane Grammar and Brisbane Boys College, have also embraced services which cater specifically for paying off school fees on every week or fortnight.

Companies such as EdStart and Futurity Invest offer services specifically dedicated to loans for private school tuition.

Elite GPS schools across Brisbane were among those who were embracing companies like EdStart. Photographer: Liam Kidston.

EdStart chief executive Jack Stevens said the company funded students attending 125 private schools across Queensland and had seen a doubling in business over the past year.

“We’ve grown by 100 per cent over the past 12 months roughly,” Mr Stevens said.

“I’m sure there’s an element of when interest rates are low, they can justify (paying it off via credit) as well.”

EdStart funded more than $60 million in school fees across Queensland, the bulk of which during the past 12 months.

The company said customers could either break their semester or term school fees down into weekly instalments or pay six years of education over an eight-year-period.

Mr Stevens said EdStart had been successful because it was geared toward school terms, unlike traditional personal loan facilities.

“We’ve had a lot of customers in the past who’ve tried to use a personal loan or mortgages … for the purposes of paying for a school fee,” he said.

Nicole Kemp and son Zach. Picture: Supplied

Mr Stevens said many families at major Brisbane schools such as BGS and BBC were embracing facilities such as EdStart.

But the practice was also being found in other businesses.

Broker Zak Avery, based in Brisbane, said it was still “pretty rare” to see loans for school fees.

“I’ve probably seen five in the past 3.5 years I’ve been working,” Mr Avery said.

Among parents who’d embraced the tactic was Rockhampton single mum Nicole Kemp, who first sent her son Zach, 12, to Rockhampton Grammar using EdStart two years ago.

“I heard about them through my sister,” Ms Kemp said.

“I’d never heard about them before either,” she said.

“It’s just a weekly payment for me, and you can add school uniforms, books, anything to do with the school year.”

Ms Kemp said the economic impact of the pandemic, and the stresses of managing the cost-of-living as a single mum, had made services like EdStart attractive.

“For an average family to afford a private school education on top of the cost of living seems unachievable,” she said.

“It’s all fitting within your budget.”