An increasing number of Australians are expected to seek No Interest Loans to help cover back-to-school costs, new data from NAB shows.
The bank expects to support more than $450,000 worth of No Interest education Loans in February to help cover the cost of school essentials – more than double the amount granted pre-pandemic.
The total amount of money for education loans, which are used to pay for uniforms, books, stationery, and computers, has grown by more than 130% between 2018 and 2022.
NAB Head of Customer Vulnerability, Mike Chambers, said the start of the new school year was a particularly stressful time for some parents.
“January is often when the full impact of Christmas spending hits and on top of this, parents are also faced with a list of back-to-school expenses they quickly have to meet,” Chambers said.
“During the pandemic, we saw a spike in No Interest Loans to help meet the need for laptops and software for remote learning.”
Chambers said that with the cost of living on the rise, the bank expect to see even more families on low incomes looking to access no interest loans to help manage school costs.
Since 2018, NAB has supported over 17,000 Aussies with $19.7 million of No Interest Loans for school essentials.
Loans for education expenses made up around 13% of all No Interest Loans in 2022, peaking in February. The average education loan was $1,150.
About 85% of all education loans were issued in NSW, VIC and QLD.
Single mum of three Lynda Birch said taking out a $500 loan for her daughter’s year 12 textbooks had made costs “so much easier”.
“I don’t know what I would have done if I had to come up with that money on my own then and there,” she said.
“My youngest son’s birthday is just before Christmas so you’re buying presents for that, presents for Christmas and then all of a sudden you’ve got to pay for schoolbooks.”
She encouraged others to investigate what kind of support was available for school costs.
“Anything that can make your life a little easier is definitely worth trying.”
Chambers said NAB had partnered with Good Shepherd for 20 years and was the only major bank offering a program that supported Australians on low incomes to access no interest credit.
“Often when faced with financial pressures people can panic and look for quick fix solutions like payday loans,” he said.
“It’s important for anyone struggling financially to know there is help available, whether that be through NAB or organisations like Good Shepherd.”
Good Shepherd’s Director of Client Services, Dave Vicary said No Interest Loans were an excellent way of helping Australians manage their household budgets.
“With the rising cost of fuel, food and energy prices, we know how much of a financial burden the new school year can be, especially when you’re already on a tight budget,” Vicary said.
“That’s why we are proud to partner with NAB to offer safe, fair, and affordable credit options through No Interest Loans. There are no hidden fees or charges – you only pay back what you borrow.”
The article originally appeared as a media release from NAB.