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How to finance your child’s private K-12 education
A personal loan could help you pay for private tuition or bridge gaps in your budget as tuition costs rise.
Sending your child to private school can open a world of opportunity. But private education can be expensive, with tuition ranging from $10,000 to $50,000 a year. Unlike college tuition, you won’t be able to finance private K-12 schools with a traditional student loan. This doesn’t mean you’re out of options. You can still finance your child’s education with other types of loans.
How can I finance my child’s private K-12 education?
There are a number of ways you can finance private K-12 education, and many of these can be combined to help ease the strain on your budget when tuition payment comes around. Here are our top methods of financing your child’s private school costs:
Personal loans
Personal loans are a popular way to finance private K-12 tuition. Because personal loans rarely outline ways you must use the money, you can fund anything from tuition to uniforms.
Many lenders offer both secured and unsecured options, and with good to excellent credit, you may have access to low rates and loans up to $100,000 to cover your child’s education.
K-12 education loans
In response to increasing private school tuition, Sallie Mae has begun offering specialized K-12 education loans. These loans have low interest rates, much like personal loans, but Sallie Mae and other online lenders are often willing to finance up to 100% of tuition costs.
You’ll have to shop around, though. Interest rates can be fixed or variable and you may need to shell out for a few miscellaneous fees. Payments typically start immediately after your child’s school receives funds.
Credit cards
You won’t be able to pay for your child’s full tuition costs with a credit card, but it can be helpful if you need to purchase books or want to invest in an additional uniform. Many have lower interest rates than you’d find with a loan. There are even cards that don’t charge interest if you qualify for an intro rate. This period can last 15 months or more.
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How do I compare my loan options?
Keep the following points in mind when applying for any type of loan to finance your child’s private education:
- Secured or unsecured. Secured loans generally offer lower interest rates. But if you fall behind on payments, the lender can seize the assets you’ve used as collateral to satisfy the loan.
- Interest rates. Always look for the best interest rate, and work out your monthly payments on fixed- and variable-rate loans to find an option that best fits your budget.
- Fees. Personal loans can come with no required fees while others may come with an origination fee. Carefully read the terms and conditions of any loans you’re interested in. Penalty fees usually apply for things like late payments or non-sufficient funds.
- Loan term. Look for a loan term that gives you monthly repayments you can afford without running too long. Otherwise, you could wind up paying a lot in unnecessary interest.
How much does private K-12 education cost?
The average cost of tuition nationwide is roughly $9,000 a year for elementary school and $13,500 a year for high school, but the exact cost will vary by school and by state.
However, your expenses won’t end there. You’ll also need to budget for common costs that can quickly add up, including:
- Textbooks, books and e-books
- School supplies like paper, pens and pencils
- A laptop, tablet or other computer for homework
- Living arrangements, if your child attends boarding school
What you’ll need to apply for a loan
If you’ve decided that a personal loan is the right choice to finance your child’s private school tuition, make the process easier by comparing lenders and prepping the documents you’ll need before you apply.
- Proof of your identity and contact details
- Proof of your citizenship or resident alien status
- Proof of income and assets available to you
- Documents that explain the purpose of your loan
In general, you’ll also need good or excellent credit in order to qualify for large loan amounts at low rates.
4 ways save money on private education
Before applying for a loan, maximize cost savings on your child’s private education by looking into other financing options.
- Scholarships. Your child’s school may provide need- and merit-based scholarships that can help you save on your child’s tuition. You should also talk with your Chamber of Commerce about local nonprofits that might offer aid for private school.
- Apply for state education vouchers. Check with your state about education vouchers to low-income families and those with special needs. States that offer this benefit include: Arkansas, Florida, Georgia, Indiana, Louisiana, Maine, Mississippi, North Carolina, Ohio, Oklahoma, Utah, Vermont, Wisconsin, and Washington, DC.
- Take advantage of tax credit programs. Eight states allow you to deduct tuition and related expenses from your taxes, including: Alabama, Illinois, Indiana, Iowa, Louisiana, Minnesota, South Carolina, and Wisconsin. Speak with an expert to learn whether you’re eligible.
- Look at options beyond private school. Many states offer charter schools, virtual classrooms, magnet schools and other alternatives to traditional public education. If they’re available, factor in these options when deciding on private school.
Bottom line
Private schools are a worthwhile investment, but they can be quite expensive. If you’re unable to cover the full amount of tuition and related expenses on your own, you do have options that can help ease the strain on your budget.
To learn more about personal loans, read our guide on your options and how to apply so you can make an informed decision about how to finance your child’s K-12 private education.
Frequently asked questions
Will I need to provide any collateral for a personal loan?
Only if you apply for a secured personal loan. But many private lenders offer unsecured personal loans of up to $50,000 or more to use toward just about any large expense — including private school tuition.
Can I use a 529 plan to pay for my child’s private education?
No. Qualified tuition plans — the 529 plan among them — are tax-advantaged savings plans designed for college or university costs.
How much can I borrow toward K-12 private school tuition?
It largely depends on the lender and your overall creditworthiness. Online lenders offer personal loans that range from $1,000 to $50,000 or more. You can typically borrow up to 100% of your child’s private school costs from kindergarten through high school if it’s within the provider’s maximum lending limit.
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