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As cost-of-living pressures continue to squeeze back pockets of Australians, NAB is expecting over $640,000 of no-interest-loans for back-to-school/education expenses to be issued in February.
According to the major bank, the total amount of money for education loans used to pay for various essentials such as uniforms, books, stationery, and computers has increased by around 73 per cent between 2018 and 2023 and doubled since the COVID-19 pandemic.
NAB head of customer vulnerability Mike Chambers said the beginning of the school year can place stress on some families.
“The start of the year is often when the full impact of festive spending hits just as families are facing new costs and long lists of back-to-school expenses they quickly have to meet,” Mr Chambers said.
“With the cost of living continuing to rise, we expect to see more families on low incomes turn to a no-interest-loan to help them manage higher back-to-school costs.”
The major bank has issued no-interest-loans to around 22,692 Australians valued at $28 million for school essentials since 2018.
According to NAB partner Good Shepherd, 85 per cent of all no-interest-loans were issued in NSW, Victoria, and Queensland, 13.8 per cent were used for education expenses, and demand for education expenses peaked in February, averaging $1,237 per loan.
“People facing the financial squeeze can panic and try quick fixes like payday loans, but it’s crucial to know there are other forms of financial support available and places you can turn to for help,” Mr Chambers added.
Throughout the second half of 2023, 44 per cent of Australians indicated they experienced some form of financial hardship, according to NAB.
Furthermore, research released by Futurity Investment Group has found that 81 per cent of Australian parents are more likely to feel overwhelmed by their financial situation, while only 19 per cent felt in control.
Children’s education was found to be a stressor for 26 per cent of parents, according to the report, while the top stressors included mortgage/rent repayments (46 per cent), utilities and rates (45 per cent), groceries (42 per cent), medical/wellbeing expenses (35 per cent), and transport costs (39 per cent).
Additionally, Futurity Investment Group found that education is an “extremely” or “very important” priority for 85 per cent of Australian parents.
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