Back to school costs landing Leinster families in debt

Meath families are among the highest percentage of parents in Ireland who say they are getting into debt trying to cope with the back-to-school spend. The annual school costs survey by the Irish League of Credit Unions (ILCU) revealed that 42% of Leinster parents say they get into debt at back-to-school time. This compares with the national average of 36%.

Of those parents in debt, a significant 46% say they are in debt of more than €500. Nationally, the figure was 24%. When Leinster parents in debt were asked if they had approached a moneylender to cope with back-to-school costs, more than a third (35%) said they had. Nationally the finding was just over a quarter (27%).

Of the Leinster parents who have used moneylenders, the majority – at 45% - say they have borrowed over €800. Again, this finding was far greater than the national average of 27% who borrowed at this level. An overwhelming 89% of this group of Leinster parents said they will use a moneylender again to cope with school costs.

Leinster also has the highest percentage of parents admitting school costs are a financial burden at a substantial 73%, compared with 67% nationally.
Over a third of Leinster parents (34%) say they will be forced to deny their children certain back-to-school items this year – slightly over the national figure of 31%. Of this group of parents, seven in ten say they will have to cut extracurricular activities from the budget. Four in ten won’t be able to fork out for new school shoes.

Commenting on these findings, Paul Bailey, ILCU Head of Marketing and Communications, said, “Despite the current recovery of our economy, families in Leinster continue to struggle to cope with the cost of sending their children to school and we are seeing increasing numbers of parents saying they are in debt, and a rise in the numbers saying they are turning to moneylenders. I would really encourage these parents to talk to their local credit union, even where they feel they have a poor credit history. Credit unions are responsible lenders who will ensure that their members do not borrow beyond their means and will work with them so that repayments are realistic for their circumstances.”

Mr Bailey continued “Using moneylenders, some who charge APR rates as high as 188%* will lead to a recurring cycle of unnecessary debt and irrational borrowing, and we would seriously urge parents to reconsider going this route. A number of our credit unions offer the Personal Micro-Credit Scheme or ‘It Makes Sense’ loan which was specifically designed to assist social welfare recipients who feel they have no option but to borrow from a moneylender. Our welcoming staff are always on-hand to answer any queries in relation to this loan, and to offer guidance on household budgeting and financial planning.”