Aussies look to no interest loans to ease back-to-school costs
From uniforms to computers, NAB has revealed the number of Aussie families turning to no interest loans for school expenses is expected to continue to rise in February.
This comes as new data published by Futurity Investment’s Cost of Education Index revealed the national average cost for a government education for a child over a period of 13 years currently sits at $81,661.50.
Breaking this down per year, the average cost of government education for a single child comes out at an approximate figure of $6,281.65.
To meet this expense, NAB has revealed it expects to support more than $450,000 worth of No Interest education Loans in February to help cover the cost of school essentials.
NAB Head of Customer Vulnerability Mike Chambers said the start of the new school year was a particularly stressful time for some parents.
“January is often when the full impact of Christmas spending hits and on top of this, parents are also faced with a list of back-to-school expenses they quickly have to meet,” Mr Chambers said.
“During the pandemic, we saw a spike in no-interest-loans to help meet the need for laptops and software for remote learning.
“With the cost of living on the rise, we expect to see even more families on low incomes looking to access no interest loans to help manage school costs.”
For reference, no interest loans are an initiative of Good Shepherd Microfinance, supported by the Australian Government and NAB under the No Interest Loan Scheme (NILS).
The scheme allows those with low incomes to access up to $2,000 for essential goods and services to be repaid over 12 to 18 months with no interest and zero fees attached.
Since 2018, NAB revealed over 17,000 Australian families have been supported with $19.7 million worth of no interest loans for school essentials alone.
Across the states, approximately 85% of all education loans issued under the scheme were utilised by families in New South Wales, Victoria and Queensland, with the average loan being $1,150.
State
Education loans issued between 2018 - 2022
Total loan value in dollars
Average loan amount in dollars
ACT
117
$152,380
$1,302
NSW
6,219
$7,419,741
$1,193
NT
236
$274,923
$1,165
QLD
3,634
$3,982,147
$1,096
SA
1,044
$1,163,892
$1,115
VIC
4,787
$5,366,477
$1,121
WA
1,104
$1,348,306
$1,221
Unknown
16
$28,502
$1,781
Total
17,157
$19,736,368
$1,150
Source: NAB
Who is eligible for a no interest loan?
Under the scheme, the Good Shepherd identifies to be eligible to receive a no interest loan, certain requirements must be met. These include:
Earn less than $70,000 annual income (before tax) as a single person, or $100,000 annual income (before tax) with a partner or if you have dependants.
OR have experienced family or domestic violence in the last 10 years.
OR have a health care card or pension card.
AND have the capacity to repay the no interest loan.
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