School fees finance for self-employed parents

Planning school fees when your income fluctuates

Self-employment gives you control over your work, but it can complicate paying regular school fees. Termly invoices, uneven monthly takings, and tax deadlines can make cash flow feel tight just when you need predictability. The good news is there are structured ways to smooth payments, keep your business running, and plan ahead for university costs without overextending.

In the UK, school fees are private costs, so you will typically rely on personal borrowing, remortgaging, savings, or a dedicated school fee loan. Choosing well begins with understanding your true after-tax position, the seasonality of your income, and how lenders view self-employed applicants. Lenders usually ask for two years of SA302s or Tax Year Overviews, recent accounts, and evidence that profits support the repayments alongside other commitments. A measured approach protects both your household and your business.

Looking further ahead, if your child is university-bound, there is a separate, state-backed system for tuition and living costs. Tuition Fee Loans cover full-time undergraduate fees in England up to £9,535 for 2025-26, paid straight to the university and not dependent on household income. Maintenance Loans for living costs are means-tested for most students under 25 who are classed as dependent. Student Finance England assesses parents’ gross income before tax and National Insurance with specific deductions, including eligible pension contributions, £1,130 for each dependent child, and £1,130 if a parent is a student. For 2025-26, household income from the 2023-24 tax year is normally used, but if your self-employed income has fallen or is unusually high, you can request a current year assessment to align support with your real finances.

Key point: build a single plan that covers today’s school fees and tomorrow’s university costs, so short-term borrowing does not undermine long-term support.

A calm, documented plan gives you leverage. Map your costs term by term, stress-test your business cash flow, and compare funding routes like personal loans, remortgaging, or savings drawdown. If you need help navigating lenders that understand self-employed income, a broker can streamline the search and present your case clearly.

Who this guidance is for

This page is for UK self-employed parents and carers considering independent school fees now, and who want to understand how their income might affect future student finance at university. It is especially helpful if your profits vary by season or contract, you take a blend of salary and dividends, or your accounts include property or other trading income. If you are weighing a school fee loan against remortgaging or using savings, you will find structured comparisons, risks explained in plain English, and a clear checklist to move forward without guesswork.

Your funding routes at a glance

1. Pay from trading cash flow - align termly fees with peak months.

2. Specialist school fee loan - fixed monthly payments over 1-7 years.

3. Remortgage or further advance - spread costs over a longer term.

4. Use savings or ISAs - avoid interest, keep an emergency buffer.

5. Family support or gifts - document transfers for clarity and records.

6. Advance payment to school - secure discounts for paying ahead.

7. Dividend or drawings planning - smooth personal income from the business.

8. Unsecured personal loan via broker - quick decision, predictable repayments.

Cost, impact, returns and risks

Who qualifies and what lenders look for

Eligibility depends on the route you choose. For unsecured personal or specialist school fee loans, lenders typically assess your personal credit history, stability of self-employed income, and existing commitments. Expect to provide SA302s or Tax Year Overviews, finalised accounts, and recent bank statements. If your income includes property or multiple trading activities, disclose all sources and note allowable deductions that affect affordability. For remortgaging or further advances, loan-to-value, credit conduct, and provable profits are central, and you will need to evidence sustainable repayments alongside other household costs.

If your child is nearing university age, remember that tuition is fully covered by a Tuition Fee Loan, while larger Maintenance Loans require household income details for most dependent students under 25. Parents’ gross income is assessed with specific deductions and allowances applied. Where the 2023-24 tax year does not reflect your current self-employed earnings, a current year assessment can keep support in line with actual income. Students who qualify as independent - for example over 25, with a child, married, estranged, or self-supporting for three years - are assessed on their own income and that of a partner, not the parents. Kandoo can help you gather the right documents for lenders today, while you prepare the evidence Student Finance will ask for later.

Simple steps to put funding in place

1. Map termly fees and your monthly business cash flow.

2. Gather SA302s, accounts, bank statements, and credit reports.

3. Decide loan vs remortgage vs savings using total cost.

4. Request quotes from lenders that suit self-employed profiles.

5. Check early repayment terms and any product fees carefully.

6. Stress-test repayments against quieter trading months.

7. Prepare Student Finance evidence if university is upcoming.

8. Finalise and diarise payments to match fee deadlines.

Pros, cons and practical considerations

What to check before you commit

Run a full affordability view that includes your tax set-asides, VAT or Payments on Account, and seasonal swings in revenue. Compare the total cost of borrowing after fees, not just the monthly payment. If remortgaging, consider the effect of early repayment charges, new fixed-rate periods, and timing relative to base rate moves. For university planning, be realistic about your household income because larger Maintenance Loans rely on accurate parental income details. If 2023-24 earnings misrepresent your current position, prepare to evidence a current year assessment. Keep documents ready - SA302s, pension contribution records, proof of dependants - and avoid overcommitting during peak business months when liquidity matters most.

Alternatives to consider

1. Ask the school about bursaries or scholarships based on means or merit.

2. Use the school’s monthly instalment plan if offered by a third party.

3. Draw from ISAs or premium bonds, then rebuild the emergency fund.

4. Adjust educational pathway - state sixth form, then university.

5. Time dividend payments to align with termly fee schedules.

6. Combine partial savings drawdown with a smaller, shorter loan.

FAQs

Q: What counts as income when lenders assess a self-employed loan? A: Typically your averaged taxable profits from SA302s or accounts, plus any regular dividends or rental income. Lenders also factor existing debts and household outgoings.

Q: How is parents’ income used for university Maintenance Loans? A: For most dependent students under 25, Student Finance England assesses parents’ gross income before tax and National Insurance, minus certain allowances. This affects the Maintenance Loan size but not the Tuition Fee Loan.

Q: Can my child get the full Maintenance Loan without my income details? A: No. The higher, means-tested Maintenance Loan requires household income details for dependent students. Independent students are assessed on their own and a partner’s income only.

Q: Our profits vary. Can we ask Student Finance to use current year income? A: Yes. If 2023-24 income does not reflect your current position, you can request a current year assessment and provide updated estimates and evidence later to keep support accurate.

Q: When do student loan repayments start and how do they work if self-employed? A: Repayments begin after graduation when income exceeds £25,000, at 9p per £1 over the threshold. PAYE handles this for employees. Self-employed graduates arrange repayments directly.

Q: Does paying school fees reduce how Student Finance calculates our income? A: No. Fees you pay to a school are not a deduction in the income assessment. However, certain allowances like pension contributions and dependants are recognised.

Q: What documents should I prepare before applying for a school fee loan? A: Recent SA302s or Tax Year Overviews, finalised accounts, bank statements, proof of ID and address, and details of existing credit commitments.

Ready to make a plan

If you want a measured, lender-ready route to fund school fees while preserving cash flow, Kandoo can help. We compare suitable personal and specialist loans, explain costs in plain English, and ensure terms fit with your trading pattern. Share your documents securely and we will shortlist options that align with both your business and your child’s education timeline.

Important information

This guidance is general information, not personal advice. Eligibility, rates, and terms depend on your circumstances and may change. Consider speaking to a qualified adviser before securing debts against your home. Student finance rules apply to England and may differ elsewhere in the UK.