School fees finance for parents

Rising education costs at a glance

Parents are recalculating. Private school fees rose sharply in January 2025 after VAT was added to fees, with average day fees now over £22,000 a year. University tuition in England increases to £9,535 for 2025-26, the first rise in eight years, and maintenance loans lift by 3.1% but still lag inflation since 2020. Meanwhile, English state school funding per pupil reaches £8,210 in 2025-26, continuing a modest real-terms improvement. The upshot is straightforward: whether you favour state, private or a mix, planning for cash flow is now critical.

Understanding APR is not just about percentages - it is about knowing what you will pay in real terms over time. With school and university costs climbing faster than many household budgets, the right finance can smooth peaks without locking you into unsuitable commitments. Equally, the wrong choice can be expensive. This guide sets out the key options available to UK parents, the costs and trade-offs to consider, and a simple way to compare routes before you commit.

Private school fees have jumped an estimated 22.6% year on year, to an average £7,382 per term, as schools pass on most VAT costs. Some families are reconsidering private education entirely, while others are seeking shorter-term finance during peak years such as GCSEs and A levels. At the same time, policy changes may push more pupils into the state sector, increasing demand for places and intensifying competition for oversubscribed schools. For university, the fee increase to £9,535 in England is modest in percentage terms but meaningful over a three-year degree. Maintenance loans increase by 3.1%, but their real value remains around 10% below 2020-21 levels, which can leave a gap for rent, travel and essentials.

What matters now is clarity. Start with your total annual education cost, then break it down by term or month. Check your savings capacity, your borrowing headroom, and your tolerance for interest-rate risk. Finally, decide whether you want to prioritise minimising interest, maximising flexibility or protecting your monthly cash flow. As a UK-based retail finance broker, Kandoo helps you compare lenders and products side by side so you can match the finance to your goals, not the other way round.

A sensible finance plan turns big education bills into predictable, affordable payments.

Who should read this

If you are a UK parent planning for private school fees, university costs for children, or a combination, this guide is for you. It is equally relevant if you are moving from private to state and need a bridging plan, or if you are navigating fee spikes due to VAT while protecting day-to-day cash flow. It suits households with steady income who want predictable payments, as well as those with volatile earnings who value flexibility and the option to overpay without penalty. If you prefer impartial comparisons and clear explanations before agreeing to any credit, you are in the right place.

Ways to fund education costs

1. Use savings or ISAs for termly payments

2. 0% purchase credit cards with disciplined repayment plans

3. Unsecured personal loans tailored to fee schedules

4. Specialist school fee finance via a broker like Kandoo

5. Offset mortgages or further advances secured on property

6. Revolving credit lines for short-term cash flow smoothing

7. Bursaries, scholarships and fee remission from schools

8. University maintenance loans and targeted parental support

What it could mean for your money

Who usually qualifies

Eligibility depends on product. For unsecured personal loans and specialist fee finance, lenders typically assess UK residency, age 18+, proof of income, stable employment or self-employment history, credit record, and debt-to-income ratios. Higher loan amounts usually require stronger affordability. Secured options will additionally assess property value and existing mortgage balance. 0% credit cards depend heavily on credit score and recent applications, and limits may be lower than a full term’s fees.

Schools may offer bursaries or scholarships based on means or merit, but application windows are fixed and evidence requirements are strict. For university, tuition fee loans are routine for eligible UK students, while maintenance loans are partly means tested, with London allowances higher than elsewhere but still below inflation since 2020. If you prefer a single application to compare multiple lenders without trawling the market yourself, Kandoo can introduce you to a panel of providers and help align term length, monthly payment and early repayment features with your needs.

Simple path to getting started

1. Add up yearly education costs and set a monthly target

2. Check income, savings buffer and existing commitments

3. Decide priorities - lowest interest, flexibility, or certainty

4. Get eligibility-checked quotes via a broker like Kandoo

5. Compare APR, total repayable, fees and early repayment terms

6. Choose term aligned to fee timetable and review cooling-off

7. Set up payment schedule and automate repayments

8. Revisit plan each term and overpay when affordable

What helps vs what hurts

Read this before you commit

Prices move. Private school fees surged as schools passed on VAT, and many are signalling further reviews within the year. University fees in England are rising after a long freeze, and living costs on and off campus vary widely by region. Build a margin of safety into your plan, ideally three months of essential outgoings, so an unexpected expense does not derail payments. Be realistic about interest-rate risk on any variable borrowing, and check for early repayment charges on fixed loans so you can reduce costs if income improves. Finally, confirm school contract terms on notice periods and payment schedules. A clear picture of obligations today and likely changes over the next two to three years will help you choose the right finance now.

Alternatives if your first choice does not fit

1. Ask the school about staged payments or termly plans

2. Apply for bursaries, sibling discounts or means-tested support

3. Consider state sector now and private at key stages

4. Explore boarding reductions, weekly boarding, or day place swaps

5. Use an offset mortgage to park savings against borrowing

6. Split costs with 0% cards and a short personal loan

Frequently asked questions

Q: How much have private school fees increased this year? A: Average day fees are now around £7,382 per term, roughly £22,146 per year, reflecting a rise of about 22.6% after VAT was applied from January 2025.

Q: What are university tuition fees in England for 2025-26? A: The cap rises to £9,535, the first increase since 2017. Maintenance loans also increase by 3.1%, though their real value remains lower than in 2020-21.

Q: Is a secured loan cheaper than an unsecured loan? A: Often yes on headline rate, but you are putting your home at risk and may pay more total interest over a longer term. Match term length to the period you need.

Q: Can I spread school fees monthly? A: Many schools allow monthly or termly plans, and specialist finance can align repayments with terms. Always check fees for instalment plans and any admin charges.

Q: Will the state sector have enough places if private enrolment falls? A: Projections suggest a shift of tens of thousands of pupils into state schools. While not all areas are under pressure, popular schools may face tighter capacity.

Q: What credit score do I need? A: Lenders do not publish exact scores. A clean recent history, stable income and manageable existing debts improve eligibility and rates. A broker can assess options quickly.

Move forward with confidence

If education costs are rising faster than your budget, you do not need to navigate it alone. Kandoo can connect you with lenders who understand school fee and university funding, provide clear APRs and total-cost comparisons, and help structure repayments around term dates. Start with a quick eligibility check and see tailored options without obligation.

Important information

This guide is for information only and is not financial advice. Credit is subject to status and affordability. Terms and conditions apply. Rates and product availability can change. If you are unsure, seek independent advice.