By Jessica Kelmon, Associate Editor
Last month I wrote about the student loan crisis contributing to a higher education bubble. While college and graduate school loans have been making headlines, there’s a much less talked about trend in student loans: parents borrowing money to send their kids to private school - starting in preschool.
In her Washington Post column titled “Kindergarten Loans” last week, Michelle Singletary cites a Smartmoney.com article about the rising rates of families – some with six-figure incomes – borrowing money to cover tuition way before college. The trend is disturbing because families are sacrificing financial stability to ensure a quality education (which, ideally, would be free if they felt their children’s needs could be met at public school), but not surprising, given that many families are still recovering (and hurting) from the recession but unwilling to sacrifice their children’s education and future. So perhaps families decide to borrow for a year or two – or four – just till things get a little easier. Sounds reasonable enough.
But there’s another risk to consider, as the New York Times reported this week: once you’ve committed to private school, you’re on the hook for tuition – even if your financial circumstances change. As Jenny Anderson reported, at least five tony private schools in Manhattan have sued families for tuition even if, for example, the parents withdrew their kids before school started, or have been an active part of the school’s community for years, or if the school could still fill that child’s spot.
Since 2008, I’ve read no end of blogs, comments, and community posts about borrowing to make ends meet – some sentiments that stood out spoke of the preschool years being particularly expensive, pay cuts being temporary, and college being a necessity (not a luxury) – and many made compelling arguments for borrowing shrewdly in the name of education. I, too, have borrowed in the name of education, and full disclosure: despite the fact that I find the trend disturbing, I think a stimulating, social, and positive early learning environment in preschool is valuable for kids and if need be, I’ll borrow to pay for preschool, too.
My question for you, GreatSchools parents who value education, is this: Would you borrow for private school?