Parents increasingly taking on substantial loans, up to £22k, to pay for private school tuition expenses
Private School Fee Borrowing on the Rise in the UK 📈
The cost of sending kids to independent schools is pushing more parents to borrow money, as they struggle with mounting fees and financial pressures. Even before the introduction of VAT this year, households were feeling the squeeze.
School Fee Plan, a provider for school fees, reported a 11% increase in borrowing last year, averaging £21,735 per parent - a 19% rise compared to two years ago. The total amount borrowed in 2025 was around 15% higher than in 2022 and 5% more than in 2023.
With the VAT introduction on independent school fees, many parents and schools have been adjusting to this change, but predictions suggest that total lent and average borrowing will continue rising. Stewart Ward, head of School Fee Plan, commented, "Our data shows a steady increase in borrowing, and this trend is likely to continue."
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Private School Fees: By the Numbers 🍎
The latest figures from the Independent Schools Council (ISC) show average day school fees of £18,000 per year for the 2023/24 academic year. For day pupils attending boarding schools, this escalates to around £24,000, while the average boarder costs around £42,500. With the VAT hike, these figures are expected to rise steeply in the next ISC report.
The increased costs could push the average day school fee to around £21,600, according to separate analysis.
Considering one child's private education from age 18, the VAT implementation has resulted in an over £100,000 jump in costs.
Last year, 94% of independent schools looked for ways to help parents spread the cost of their children’s fees, according to a survey by School Fee Plan. This underlines the importance for many families of spreading the costs over a year rather than paying in termly installments. As Ward explained, "Paying monthly fits better with most people's budgets and lifestyles."
While some parents may choose to pay the fees upfront to avoid interest charges, it's important to weigh the pros and cons, as discussed in our article comparing upfront and monthly payments.
The impact of VAT on private schools has been substantial. According to the government, around 37,000 private school pupils (6%) are expected to leave schools due to the VAT fees, whereas the Independent Schools Council (ISC) reported that 77 schools have announced closure plans since the policy was announced in 2023.
[1] The Guardian - "Parents borrowing more to pay for independent school fees as household finances suffer"[2] ISC Report - "Independent Schools Council Annual Census"[3] Financial Times - "Impact of VAT on Independent Schools"[4] BBC News - "State school applications climb as private school fees rise"
The rising private school fees, exacerbated by the VAT introduction, are leading parents to borrow more money, averaging £21,735 per parent last year, as reported by School Fee Plan. This trend is likely to continue, impacting not only personal-finance but also education-and-self-development decisions, as some families may need to reevaluate their financial situation and education choices.
In the wake of the VAT implementation, the total cost of one child's private education from age 18 is projected to increase by over £100,000. This substantial increase may force some families to World of Finance wrestle with difficult decisions, including the possibility of switching to a state school or seeking alternative means of financing their children's education.
