I’m a parent, and so I get that many other parents want the best for their children. I understand that when it comes time for college, if parents don’t have the savings, they take out loans to pay for their children’s higher education.
But what about those parents who are also bent on getting their children into the best preschools and who, if they can’t afford the tuition, just borrow the money?
“It used to be that families first signed up for education loans when their child enrolled in college, but a growing number of parents are seeking tuition assistance as soon as kindergarten,” writes Annamaria Andriotis of Smartmoney.com. “Though data is scarce, 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.”
Andriotis goes on: “Much of this demand is coming from high-income families. Roughly 20 percent 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, according to 2010-11 data, the latest from the National Association of Independent Schools.”
She explains that “the rise in private school loans coincides with a rise in tuition. The average cost of private school is nearly $22,000 a year, up 4 percent from a year ago. The average interest rates for the pre-college loans range from around 4 percent to about 20 percent.”
Andriotis reports that one couple that took out loans for their kids is hoping to give them the best education early on to improve their chances of getting into a better college. “We’ll figure out how to pay for it then, or with any luck they’ll get scholarships,” the father said. “Right or wrong, we’re hoping our experiment works.”
I’m not sure what to say because my head feels like it’s exploding. Loans for kindergarten? One word: crazy. But that’s just me.
What do you think? This week’s Color of Money question: What do you think of the trend of well-heeled parents taking out pre-college loans to pay for their child’s private-school tuition? Send your responses to colorofmoney@washpost.com. Be sure to include your full name, city and state and put “Kindergarten Loans” in the subject line.
Your Money and Your Honey
A survey conducted by Today.com and Self.com asked couples a very interesting question: How much money is it okay to spend from a joint account or credit card before checking with your partner?
Of the nearly 22,000 people who responded, about 36 percent said they would feel comfortable spending $50 to $99 before consulting their spouse or partner. Another 22 percent said the bar is between $100 and $499. About 28 percent of readers said they check in with their spouse about every single purchase, no matter how small. Only about 6 percent said they never tell their spouse how much they spend on anything.
In another survey, Today.com and Self.com investigated financial infidelity.
It turns out that 37 percent of men and 56 percent of women in the survey acknowledged having lied to their partner about money. The poll also showed that women were nearly twice as likely as men to hide purchases or receipts from their partner, with nearly one-third of women admitting to the practice, reports Allison Lin of TODAY.com.
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