An increasing number of parents are borrowing money to fund their children's education a new report has revealed.

In the last year, the number of applications for personal loans to cover school fees has risen by 38%, the Sainsbury's Bank study found.

Loans manager at Sainsbury's Bank, Steven Baillie, commented: "We expect to see a growing number of parents taking out loans to help pay for their children's education."

"Those parents doing this need to make sure that they shop around and find a competitive loan rate."

The increase is seen as being a result of the 15% rise in household expenditure on school fees in recent years, as demonstrated by government data on the issue.

In 2004/05, total household expenditure on education fees was an estimated £7.876 billion, compared with £6.860 billion for the period 2001/02.

However, on a regional basis, London households on average spend the most of education fees and those in the East Midlands the least.

Households by location	Average spend on school fees per household between 2002/3 – 2004/5
London	£577.2
South East	£384.8
South West	£301.60
East	£280.80
Yorks & Humberside	£249.60
North West	£208.00
Scotland	£187.20
Wales	£176.80
North East	£166.40
West Midlands	£156
East Midlands	£140.40
United Kingdom	£275.60

For those people taking out personal loans to help cover the cost of education fees, Sainsbury’s Bank says that it is important to shop around for a competitive loan because it could save them hundreds of pounds in interest repayments.

Steven Baillie said: "Around 620,000 children are now privately educated in schools, which are consistently charging more in fees. The average fee increase in 2005-2006 was 5.7% and since 1999, they have risen by around 50%. Given this, and the fact that more children are being privately educated, we expect to see a growing number of parents taking out loans to help pay for their children’s education."