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More parents taking out loans for primary schools

May 11, 2012 Philip Burgess

Student loans are usually taken out by college attendees who need the money to pay for their expensive bachelor's degrees. However, debt collection agencies may be interested to know that there is a recent increase in the trend of parents taking out loans to fund a kindergarten through high school education for their children. Loans covering the education of children before college are becoming more popular, Smartmoney reported, as the average cost of a private school is almost $22,000 according to the National Association of Independent Schools. Smartmoney explained that a record number of parents are being forced into debt to pay for their children's primary school education. The source explains that the loans being doled out by lenders are somewhat different than they have been in the past - for instance, the repayment period for these types of loans is often longer than a traditional student loan and they are smaller on average. Admissions Quest reported that both banks and alternative lenders often offer K - 12 loan options, most of which depend on the credit rates of the parents, but noted that though the payment period is usually spread out, interest rates on these types of loans are often much higher than traditional student loans.