• Premium Credit sees total lending through its School Fee Plan (SFP) rise 15% in two years

Parents are borrowing more for independent school fees as they look to spread the cost, new data from School Fee Plan, a leading provider of finance for school fees, shows.

Average funding for parents through School Fee Plan rose 11% last year to £21,735 and is 19% higher than two years ago. The total lent last year is around 15% higher than in 2022 and 5% higher compared to 2023.

The rise in average funding and total lent comes before the introduction of VAT on independent school fees which took effect in January. Premium Credit says the first three months of this year have seen parents and schools adjusting to the change with many schools yet to announce fee rises.

Its research* with headteachers, bursars and finance managers at independent schools found almost all (94%) are looking for schemes which enable parents to spread the cost of their children’s fees. Research last year found 89% were doing so.

Stewart Ward, Director Education Sector & Head of School Fee Plan, Premium Credit said: “Parents are having to reassess their finances following the introduction of VAT on Independent school fees.

“Our data shows the total lent and the average amount borrowed was rising steadily before the introduction of VAT, and is likely to continue to increase, underlining that for many parents, it makes sense to spread the cost over a year rather than in termly payments in exactly the same way we are all used to doing for our mortgage payments”

“That applies even if they can afford to make the payments every term as paying monthly fits better with most people’s budgets and lifestyles.”

For further information on SFP, please visit School Fee Plan: https://www.myschoolfeeplan.com/application/schoolfeeplan

• * Premium Credit commissioned market research company Pureprofile to conduct research with 100 head teachers, bursars and finance managers at fee paying schools in the UK. The research was conducted online during March 2025
• ** Premium Credit commissioned market research company Pureprofile to conduct research with 100 head teachers, bursars and finance managers at fee paying schools in the UK. The research was conducted online during March 2024.
• For 30 years, SFP has helped parents finance their children’s independent school fees by enabling them to spread the cost rather than paying a lump sum each term. SFP is the convenient and manageable way for parents to pay for independent school fees and extras such as music tuition and trips. It splits the cost into regular monthly direct debits, like any other household bill.
The process of applying for a SFP for both parents and schools is seamless. Parents apply to open their account online before the beginning of any term. If the application is approved, SFP will notify the parents and the school. SFP sends the full payment to the school at the start of each term.