Believe it or not, there’s a new kind of student loan on the horizon. But it’s not used to put your kids through college. It’s so they can go to pre-k. Melanie Woodruff recently penned an article for the entitled “Daycare Is So Expensive In New York That Parents Are Taking Out Loans.” In it, she discusses how New Yorkers are resorting to personal loans to give their kids the advantage of better early childhood education. As she points out, the unfortunate reality is that public pre-Ks only admit about 70% of the kids who apply for their free programs. That means 8,200 out of 28,000 kids that apply have limited options.

What’s the Alternative?

For many that leaves only one option, private pre-k education, which can cost upwards of $30,000 a year. And the unfortunate truth is that many New Yorkers simply cannot afford it and so they take out loans to give their kids an early advantage. Even the city itself is jumping into the pre-k loan business. Christine Quinn, City Council Speaker and mayoral candidate, has initiated a new pilot program funded by a New York City credit union, Neighborhood Trust Financial Partners.

The new program offers pre-k funding for children two to four. But there are only 40 loans available at the 6% interest rate. That still leaves 8,160 without many options. Plus, the qualifications are fairly hefty. You must make $80,000 to $200,000 a year as a family, have at least a 620 credit score and undergo financial counseling. These requirements may be beyond some people’s reach.

Does It Make Sense to Get a Personal Loan for Pre-K?

That’s a great question and the debate is on. Some experts, such as Matthew Yglesias of Slate say no. Why? He thinks eventually the borrowers will default and cost the city or that the loans will burden the borrowers for years to come. But defenders of the program point to the disadvantages a child faces when he does not have a good childhood education. For example, by kindergarten, kids from higher income families who can afford pre-k programs have doubled the literacy and math scores of lower-income families who can’t afford good pre-k programs. Plus, the so-called, achievement gap between high and low-income kids has increased to 70% since 1970.

So the jury is still out. And really no one can answer that question, but you. When the day comes that everyone who wants free pre-k has access to it, a personal loan may be an unnecessary expense. For now, it may be the only option some families have to get their child’s early education started on the right foot. In fact, it may be an investment you can’t afford not to make.

To read the full article by Woodruff visit: