Do the maths when paying school fees

01 February, 2007

An online survey by Allianz, one of Australia’s largest general insurers, of over 400 Sydney families found that while many families are making financial sacrifices to meet the costs of private education, 74% were unaware of financing options that could ease this strain on the family budget.

85% of those surveyed said they wanted to ensure their children received the best education. A whopping 82% saw private or non-government school education as the best way to invest in their children’s future.

The results of the survey are also echoed in a recent Australian Bureau of Statistics (ABS) Survey. According to the ABS1, in 2005, 67% of full-time school students in Australia were enrolled in government schools, down from 71% in 1995. The proportion of students enrolled in non-government schools increased by four percentage points over the period.

The Allianz survey found 10% of parents, who sent their children to a private school, paid over $35,000 per annum in school fees; 31% spent between $15,000 and $35,000; and 59% paid $15,000 or less. In addition, parents pay for textbooks, uniforms, excursions and sometimes boarding fees.

“Parents told Allianz that school fees were commonly paid by drawing down on the home mortgage or using a credit card. However, parents were not generally aware of the real cost of using these options after interest costs were factored in, “ says Nicholas Scofield, Allianz General Manager Corporate Affairs.

The financing option used and the time taken to repay can potentially add thousands of dollars to education costs.

Mr Scofield said that some parents had considered downsizing their home or moving to a cheaper suburb in order to cover the costs of sending two or three children to a non-government school.

When it comes to children’s education, parents are looking for ways to better manage their cash flow and in response Allianz has created EasyFees.

EasyFees enables parents to borrow to pay their annual fees to the school up front. Parents then repay the loan, with interest at a competitive rate, in instalments over 10 months. Instalment payments suit families wanting to manage cash flow by smoothing out spikes in the family budget. EasyFees has the added advantage that if a school offers an early-bird discount, parents can also take advantage of this.

“In Sydney’s Northern and North Western suburbs, 40% of our survey respondents said they liked the idea of paying school fees in monthly instalments. In the North Western suburbs, 19% of respondents were so impressed with the EasyFees instalment method they told us they’d be likely to sign up, ” says Mr Scofield.

“Using a home loan to fund school fees can add thousands of dollars in interest costs because people typically pay it back over a longer period of time."

EasyFees is useful for far more than just paying school fees. It allows parents to bundle education costs to include items such as boarding fees, textbooks, uniforms, school camps and excursions.

Allianz provides a school fees calculator on its website where parents can get a quote to see how much their instalments will be.

“Some parents have been very pleasantly surprised, when the calculator delivers them a saving on their existing arrangements. It pays to shop around and Allianz encourages parents to do that,” says Mr Scofield.

Like-for-Like Comparison of alternative loan options

Annual Interest Rate
Monthly Repayment
Interest Payable
Total Repayable
Payment Period
10 months
10 months
10 months
10 months

Allianz Australia
EasyFees is provided by Hunter Premium Funding Limited a wholly owned subsidiary of Allianz Australia Insurance Ltd. Allianz Australia is proud to be of service to over 2 million policyholders and over 50 percent of Australia’s Top 50 BRW listed companies have some form of insurance cover with the organisation. The company is a member of the global Allianz Group, which operates in over 70 countries and serves over 60 million customers.

Allianz Australia offers a wide range of insurance products and services including car insurance, home insurance and Life insurance.

Media Enquiries: Allianz Australia Limited
Nicholas Scofield, (02) 9390 6596,

1 Australian Social Trends 2006 (ABS)