School Fees Finance
A third of all pupils in independent
education receive help from schools with their fees
could afford to pay. More recently, schools have begun to
respond: although this year’s 4.5% feels like a hefty hike in fees, it is below the educational component of current CPI inflation (5.1%) meaning that schools are raising fees more slowly than their own running costs are rising. In addition, we have seen other changes,
such as an increasing trend for schools to direct financial support towards means-tested bursaries rather than scholarships, thereby spreading the funds wider. In the last year, money contributed to fees
via means-tested bursaries increased by 9.4% to a value of £280 million among schools completing the ISC census. In total, a third of all pupils now receive some form of support from schools with their fees. Certainly schools are facing difficult
financial challenges themselves with many reportedly only just breaking even. So if it is financially impossible to lower the fees, could schools be doing even more to make payments easier for parents? What we have found in talking with our parent customers is that for the majority,
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the total cost of a private education remains feasible, but the lumpiness of the payment schedule is increasingly difficult for families on a tight budget where parents receive an annual income. A family with two children in independent
education is paying, on average, over £9,000 per term (based on £4,500 per child, per term). It is unsurprising that many are finding it challenging to arrange such a significant chunk of money three times per year. It is also clear that spreading the cost of
paying fees over the entire year would sub- stantially ease the burden on many families, but this has become much more difficult since changes resulting from the Consumer Credit Act came into effect last year. There are now a number of complex and expensive regula- tory hurdles to overcome before a school can legally offer monthly payments. One possible solution has become increas-
ingly popular over the past year: third-party schemes such as our own which remove the need for schools to become credit providers. With the Close Brothers School Fees Scheme, we pay the termly fees directly to
a child’s school and the family then pays us monthly. Because we are a fully certified provider of credit, we take the regulatory and administrative burden away from the schools, and in turn we can offer cheap and simple financing to families. This year, Close Brothers is expecting to see
the number of schools involved in the scheme quadruple, to over 600. We have also found that parents are keen
to be involved with over 2,000 in the past year choosing to spread the cost of fees over the entire year. Other education-related costs such as school trips and sports equipment can also be included and paid for monthly. Given that inflation is set to continue
rising for the foreseeable future, it is likely that schools will be unable to freeze fees or increase bursaries. And while hard-working parents remain willing to pay for their chil- dren’s education, they should be safe in the knowledge that schemes like ours exist and are there to offer a helping hand. For more information visit
www.closeschoolfees.com, call 0844 742 4243 or email
enquiries@closeschoolfees.com
Summer 2012 FirstEleven 47
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