Back to school: Parents forced to approach moneylenders and go into debt over costs
MORE parents are borrowing money to fund the cost of getting their children ready for the new school year.
There has also been a rise in the number turning to moneylenders to pay for the likes of books and uniforms, a survey from the Irish League of Credit Unions shows.
A third of parents will be forced to deny children certain back-to-school items because they can’t afford them. This is despite a fall this year in the overall cost of getting children prepared to go back into the classroom.
Parents of primary-school children expect to shell out €1,000, while the cost for secondary is just short of €1,400.
The annual survey shows that parents are borrowing more.
This year, parents of primary schoolchildren expect an average debt level of €367, up by €22 on last year. Parents of children in secondary schools are going into debt to the tune of €443 on average, up almost €30 on last year.
Of those parents in debt, more than a quarter say they have turned to moneylenders in an effort to cope with back-to-school costs.
This is up from 20pc last year.
People are borrowing sums of between €400 and €500 from moneylenders. More than a quarter of the respondents said they had borrowed over €800.
When asked why their preferred option was a moneylender, almost half said they felt they would be guaranteed the money and that the approval processes in banks and credit unions would be more difficult.
Four in 10 said they felt they had no other option because they had a bad credit history.
A majority of this group would use a moneylender again this year to cover the back-to-school spend.
Of this group, 40pc said they could not afford new school shoes for their children, while seven in 10 said extra-curricular activities would be cut from the budget.
Moneylenders charge annualised interest rates as high as 188pc.
A third of the parents surveyed said they would have to sacrifice spending on family holidays in an effort to meet school costs.
A fifth said they would have to cut spending on household bills and 15pc said spending on food would have to suffer.
Parents said they were spending €999 per primary-school child, a decrease of €49 on 2017.
For secondary school children, parents said the cost per child had fallen by €22 to €1,379.
In general, this decrease was due mainly to falls in the prices for extra-curricular activities, transport and after-school care.
Paul Bailey, head of marketing and communications at the league, said: “It’s somewhat encouraging that parents are reporting that costs have reduced a little since last year. But at the same time, we are seeing increasing numbers of parents saying they are in debt and a rise in the numbers saying they are turning to moneylenders.”
He encouraged these parents to speak to their local credit union, even where they feel that they have a poor credit history.
Mr Bailey added: “A number of our credit unions offer the Personal Micro-Credit Scheme or ‘It Makes Sense’ loan, designed to assist social welfare recipients who feel they have no option but to borrow from a moneylender.”