Not Just Kid Stuff

Putting your child through private school takes more than lunch money

to secure their spaces and is credited as tuition. Although they receive financial aid, the family must still pay a significant amount of the tuition. They have a monthly payment plan.

The NAIS Website also provides a list of six companies that provide tuition loan programs, but applicants should be wary of them. These programs work much like a consumer loan program. Your credit is reviewed and, if you are approved, the company will make a check co-payable to the parent applicant and the school, or sometimes just the school. The parent and the loan program will agree on a repayment schedule, which is usually spread over 10 to 15 years. In addition, some plans provide only a year’s tuition and must be applied for annually.

The Marlton, New Jersey-based SLM Financial Corp., a Sallie Mae company, offers loans to pay for grades K through 12. Interest rates start at prime plus 1%, and loans can cover computers and musical instruments and lessons. The company also offers repayment terms of up to 30 years. First Marblehead in Marblehead, Massachusetts, provides unsecured 15-year loans for a minimum of $1,000. The maximum is the cost of the child’s tuition. Parents can borrow one year of tuition at a time. Some loan companies require that the school the child attends must be a participant in the loan program.

“A family has to ask itself if it really wants to do this,” says Mitchell. This option can leave you paying significantly more than the year’s tuition as interest and debt accumulate annually. While the rates for education loans are usually lower than those for consumer loans, “borrowing of any kind is definitely not the most attractive option,” he believes.

Hawkins agrees. “Oh God, no!” she says. “A loan would seem to drag out and never end. The monthly payment is much easier and there is no interest.” She believes that parents who choose private school must also make some lifestyle decisions that often involve sacrifice. She has tried to maintain a balance so that her sons, who share classrooms with the offspring of many of Washington’s wealthiest and most powerful families, don’t feel deprived, but “we drive old cars,” Hawkins adds. “You get into the mind-set of making a car payment, but it’s going toward education.”

Stretching Out Your Payments
Although private school is expensive, there are financial aid options. For example, if you can’t afford to pay tuition in a lump sum, you might be eligible for a monthly tuition plan that stretches out your payments.

Also, there are needs-based plans that can help defray some of the costs. Visit the National Association of Independent Schools’ Website at www.nais-schools.org to obtain a list of schools offering alternative payment options.

Ponying Up For Preschool
If you want to send your child to private preschool and kindergarten, set up a flexible spending account through your employer to pay for qualified dependent day care. You can then withdraw the money, tax-free, when it comes time to pay tuition. Carefully figure out your annual educational

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