"We've got a $30,000 year coming up when they're in years 11 and 12, so spreading out the impact of that will be a godsend," said Ms Carriage.

EdStart has also covered the cost of her Year 9 child's excursion to Washington DC's National Aeronautics and Space Administration later this year, an opportunity the "maths and science nut" would otherwise have missed out on.

The need for EdStart had arisen after almost two straight decades of private school fee increases outpacing inflation and wage growth, Mr Stevens said.

Yet the growing unaffordability did nothing to dent demand until 2015, since when the Australian Bureau of Statistics has recorded government schools' share of enrolments creeping back up – it was 65.6 per cent in 2017 – after 20 years of decline.

"Regardless, there are still 1.4 million kids in non-government schools whose families are paying $10 billion a year to keep them there, so there's a huge market for debt solutions that support them," Mr Stevens said.

EdStart charges annual interest rates of 7.9 per cent to 12.9 per cent on its loans, depending on each family's creditworthiness profile, and the length of the loan term requested. Those rates are higher than paid by the 10 per cent of families in EdStart's applicant database which currently use mortgage redraw to cover private school fees, but are a bargain for the 15 per cent of families having to resort to carrying credit card debt.

With its business funded with $1 million in venture capital led by H2 Ventures, EdStart had hitherto backed its loans with short-term debt facilities.


However the securitisation, structured by alternative asset manager iPartners, has shored up its growth for the next five years.

"EdStart were hitting up against the next stage of growth, because the private school principals want to solve the problem of unaffordability," said iPartners co-founder Rob Nankivell.

"They don't want parents under financial stress."

The EdStart securitisation, which closed this month oversubscribed by wholesale investors, has two tranches.

The first, which raised $1.95 million, offered a 7 per cent coupon on drawn capital, paid quarterly. The first tranche has loss protection such that 35 per cent of the underlying loans by value would have to default, with no recovery, for investors to lose some of their capital.

Most of that buffer is provided by the second tranche, which raised $1 million, whose investors receive a 12 per cent coupon paid annually. However only 5 per cent of the underlying loans by value have to default, with no recovery, for these investors to make a negative return.

That apparently thin line of defence does not seem so flimsy once you understand the behavioural economics behind parents paying for their children's education, according to Mr Nankivell.

"All the evidence points to parents giving up a lot before they will give up a private school where their children are happy," he said.

Ms Carriage provided firsthand evidence to the affirmative.

"We don't get brand new clothes, we don't go out or have holidays. But Calrossy has a fantastic support network and a lot of good things on the horizon – parents are OK with the fees," she said.