The amount of loans taken out for school expenses has grown by almost three-quarters as families struggle with the rising price of sending their kids to school amid a cost-of-living crisis.
The total value of education loans with NAB has grown by 73 per cent since 2018, and the bank expects customers to take out more than $640,000 worth of no-interest loans throughout February.
The trend accords with research revealing almost one third of Australian families can’t afford back-to-school expenses.
A Finder survey of 1039 respondents, including 359 parents, found 30 per cent were unable to pay for essential equipment such as stationery and uniforms.
If the results were extrapolated to a national level, that would account for 1.9 million households.
Eleven per cent of parents surveyed admitted they will have to go into debt to pay back-to-school costs, which average $2547 for each primary school child and $4793 for secondary students, Finder analysis revealed.
Belinda, a mum of four, said with grocery, electricity, phone, and internet bills piling up, she had to resort to an education loan to get her children back to school.
“It has become so hard at the end of the year, just before Christmas when the schools release the uniform, book lists and now technology requirements and I think how on earth are we going to pay for this?” she said.
Sarah Megginson, personal finance expert at Finder, said household budgets were extremely tight after a difficult 12 months coupled with Christmas costs weighing heavily on families.
“This is a widespread problem,” she said.
“With the cost-of-living crisis extending into 2024, the pressure isn’t likely to ease anytime soon.”
The start of the school year can be a particularly stressful time for families, NAB head of customer vulnerability Mike Chambers said.
“The start of the year is often when the full impact of festive spending hits just as families are facing new costs and long lists of back-to-school expenses they quickly have to meet,” he said.
SA Greens education spokesman Robert Simms urged the state government to scrap public school fees to help ease the burden.
“It’s completely unacceptable that so many parents are facing the possibility that their children will miss out on accessing the education that they deserve because they are expected to pay for laptops, books, and stationery,” he said.