‘Everything is getting that bit tighter’

There has been a “sizeable increase” in the number of parents taking out credit union loans this summer to help with spiralling back to school costs.

Manager of North Midlands Credit Union (NMCU) Tom Allen says that it has lent out in the region of half a million euro to local families preparing to send their children back to school after the summer holidays. The rise in the cost of living means over the last year is “beginning to put the squeeze on people in a lot of ways”, he says.

“What we are seeing here is everything is getting that bit tighter. We see people withdrawing their savings to supplement their incomes.

“There is a lot of pressure on people, income-wise, with inflation the way it is. We are seeing that the level of borrowing from parents for primary, secondary and third level as well, it is increasing. It is significantly up. “

Rose Cosgrove, loans support officer with NMCU, says that in addition to the much publicised increases in fuel and food prices, back to school costs have also risen sharply.

“The costs of books and uniforms seem to have gone up this year. If you three or four children, you could be talking €1,500 to €2,000. It’s a big amount of money just to get them into primary and secondary school.”

Ms Cosgrove says that you can see the stress on parents’ faces when they come in to apply for loans.

“Their normal day to day spending would have been quite different a year ago and with the way the cost of living has gone, you can see that they are stretched. Their levels of borrowing, where they normally wouldn’t have been borrowing so much, are now quite high.

Mr Allen says that while in previous years families were able to budget for back to school costs, that has not been possible for many households this summer. Not only has the number of people looking for loans gone up, but the amount of money they are looking for has also risen.

“Parents are responsible people. Traditionally you would have seen people putting a few euro away throughout the summer for the kids going back to school, but the drain of everyday expenses is making that more difficult, allied with the increased [back to school] costs in their own right.”

One of the credit union’s most successful initiatives in the last decade has been its low-cost loan programme for third level students, which to date has lent out in the region of €10m.

“Here in this credit unit we’ve always been active in this space. We have always lent quite a bit to parents for educating their children.

“Our third level college programme is successful. It’s called: ‘We’re committed, if you are’. We commit to lend the student so much each year to go to college. That’s where a lot of students and their parents get caught, they can fund it one year but it has to be continually funded over three or four years.

“People talk about free third level education, but it’s not free. It is never free. At a basic level there is a €3,000 contribution, but on top of that, particularly for people living in an area such as Mullingar and the rest of the midlands, you are talking about accommodation when you go to college, or you’re talking about commuting as well as living expenses while there.

“The cost of accommodation in third level now [is so high]. We are hearing from some people €7,000 and €8,000 a year. Not that long ago the cost of that was €4,000 to €5,000. That’s a huge cost. It’s also obviously scarce and sometimes the quality isn’t great.

“These are the level of costs that we’re hearing and it is obviously putting a strain on parents.”