Money

Parents Taking Out Student Loans For Kindergarten

| by Michael Allen

Private school experts and the small number of lenders who provide loans for kindergarten through 12th grade say pre-college loans are becoming more popular.

TheAtlanticWire.com reports that the total amount of loans families requested rose 10% compared to a year ago.

According to the National Association of Independent Schools (NAIS), about 20% of families that applied for aid to pay for their children's kindergarten through 12th grade private school education had incomes of $150,000 or more; up from 6% in 2002-03.

According to the NAIS, the rise in private school loans jives with a rise in tuition. The average cost of private school is nearly $22,000 a year, up 4% from a year ago and up 26% from 2006-07.

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While schools increased their financial aid budgets, the gap between free aid and tuition costs is getting bigger for many parents.

As a result, enrollment is dropping as fewer families can afford to pay. Total private school enrollment is projected at around 5.3 million this year, down 11% from 2007, according to the Department of Education.