Day care is so expensive in New York City that city officials have issued a $300,000 city subsidy for day care loans programs. Offered through Neighborhood Trust Financial Partners, the loans provide parents with needed daycare funds with a six percent interest rate.
The program is aimed at middle-class families who can’t afford to cover the cost of day care in the expensive city.
Families are illegible for the program if they have children between the ages of 2 and 4 years old. Only 40 families will be eligible for the program during its first year. If successful, city officials hope to expand the day care loans program in the future.
Speaking to the New York Post City Council, Speaker Christine Quinn said of the day care loans:
“Early-childhood education is one of the most important investments a parent can make.”
New York City is not a cheap place to raise children with the average cost of daycare running $13,000 per year.
To qualify for the program, families must have an annual income of $80,000 to $200,000. Applicants must also have a credit score of at least 620, and they must complete financial counseling.
The program sends the cash directly to the parents’ day care center of choice, ensuring that the program’s cash is used where intended.
Much like deferred college loan payments, parents under the day care loan program can choose to make interest-only payments until their children reach kindergarten-eligible age.
Critics of the program are likely to point out that America is currently in the middle of a college loan crisis that has cross the one trillion mark. Yet, despite the rising costs of child education, parents tell The Post that they are willing to take the loans in order to cover short-term costs.
Do you think day care loans are a good idea or just another step towards financial ruin based on mounting loan pressures?
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