Friday, March 30th, 2012
A growing number of American families are seeking loans for education long before their kids even apply to college. According to SmartMoney.com, families are applying for school loans when their children are as young as 5 years old:
Though data is scarce, private school experts and the small number of lenders who provide loans for kindergarten through 12th grade say pre-college loans are becoming more popular. Your Tuition Solution, one of the largest lenders in this space, says demand for the upcoming year is already up: This month, the total dollar amount of loans families requested rose 10% compared to a year ago; at that pace, the company expects its total funding to rise to $20 million for 2012-13. Separately, First Marblehead, which exited the market in 2008, reentered last year as demand for loans began to rise.
Much of this demand is coming from high-income families. Roughly 20% of families that applied for aid to pay for their children’s kindergarten through 12th grade private school education had incomes of $150,000 or more, according to 2010-11 data, the latest from the National Association of Independent Schools. That’s up from just 6% in 2002-03. Those who don’t get approved for free aid, like grants, increasingly turn to loans, experts say.
Image: Kindergarten class, via Shutterstock
Add a Comment
Wednesday, February 29th, 2012
The Wall Street Journal is reporting on a new niche for lenders–fertility treatments including in vitro fertilization. So-called “fertility finance” companies are increasingly reaching out to women who are facing the expensive and often long road of medical fertility interventions, offering loans to cover the costs and enable women to start treatment before saving up all the money they will need. Critics say the companies are taking advantage, offering unreasonably high interest rates–as high as 22 percent.
From the Journal article:
At a time when many traditional lenders are struggling, companies that join forces with doctors to make loans for in vitro fertilization, egg harvesting and other fertility treatments say their business is thriving.
One reason: Fertility-finance companies are getting a boost from the banking industry’s retrenchment. For example, credit has become tight for home-equity loans and credit cards, two ways couples often have paid for fertility treatments that often top $20,000. Mike Gilroy, Springstone’s president, says business is robust because “if the time is right” to have a baby, “people want loans even in a sluggish economy.”
Amid a struggling economy, companies in the business predict that lending will grow this year as demand swells from couples desperate to have a baby but unable to afford fertility procedures on their own.
Despite the demand from would-be parents, the loans have generated criticism from some doctors, concerned that they take advantage of couples’ desire to have a baby at any cost. Some doctors won’t offer the loans. Others worry that doctors who invest their own money in fertility-finance companies will push the loans on patients.
Image: Couple signing papers, via Shutterstock.
Add a Comment