Ways to Afford the Child Care You Really Want

Program Offers Loans to Help Parents Afford High-End Child Care

Annual child care costs are typically higher than the average amount families spend on groceries each year, according to the National Association of Child Care Resource and Referral Agencies. What this means that families are struggling to afford any child care--much less high-end or highly-desired care options. An innovative new national program is helping parents to afford the programs they really want through competitive interest rate loans and lines of credit specifically to pay for quality child care.

How it works:
The I Pay Childcare program, which launched first in Texas, is hoping to become a national child care option to help parents lower monthly payments. The premise is that instead of paying for child care with cash (on what parents' current budget can afford) or by using high interest rate credit cards, an "Educate Early" loan can help families to reduce monthly childcare payments while allowing them to afford the highest quality care desired.

The business is essentially a financial service focused on bringing banks, child care centers and parents together. If the loan application is approved, an account will be opened in the client's name with an approved lender. The amount of money to be borrowed each month will be calculated by the client and then the client will make a monthly deposit to the lender. I Pay Childcare will pay the child care center the amount owed each month. Flexible repayment options are included.

Pros and Cons:
For families who really are hoping for a certain child care arrangement that is currently higher than what they can afford, the arrangement may be very attractive. It can allow youngsters to be placed in a child care setting that is of a higher quality and more desirable. However, parents will need to stay on top of their loan and not get into a debt cycle where they owe more than they can truly afford repaying. Families need to keep in mind that quality care is very important for a child's early education and that not all child care arrangements are equal. But while it is true that you often get what you pay for with child care, parents should shop around and carefully consider all the care options before jumping into a child care loan situation. If possible, speak with a financial advisor to see if taking out a child care loan makes sense and is right for your family.