More debt being taken on for education

According to estimates by Sainsbury`s Finance, £37m of debt was taken on last year in personal loans to help pay for school fees, university fees and general education costs, headlinemoney.co.uk reports.

The supermarket bank has claimed that in total, `just under 4,400 personal loans with an average value of around £8,500 were taken out for these reasons`.

The bank estimates that £12.25m of debt (1,100 loans) was taken on to help cover the cost of school fees, while £13.56m of debt (1,900 loans) was taken on for university and college costs. A further £11.26m of debt (1,400 loans) was taken on for `other education`.

Head of Loans at Sainsbury`s Finance, Steven Baillie, said: "The cost of education has been rising. School fees rose by 5.9% in 2009, and the education component of the Consumer Price Index increased by 5% in the 12 months to February 2010. These rises can be hard to bear in difficult economic times, so it is not surprising to see many people taking out personal loans to help with this cost.

"Parents and anyone paying for education, such as professional qualifications, need to make sure they are shopping around for the best loan rate available and not simply turning to their current account provider."

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