Viewing 40 posts - 81 through 120 (of 121 total)
  • Overpaying Child At Uni?
  • franksinatra
    Full Member

    i was horrified to find she was buying value cheese. Student or not, no daughter of mine is eating value cheddar, so I upped with a cheese surplus. These things are important

    I having to revisit this thread as my daughter is two and a half weeks in to uni life. I was chatting to her last night and had a bit a shock. In fact, it was a real kick in the gut.  I’m not really quite sure how to say this but I know I need to share with understanding, supportive folk. She went shopping. She bought coffee.

    It. Was. Instant. Coffee.

    Value brand as well.

    I am lost.

    TheBrick
    Free Member

    She is a politics student so doesn’t have many lectures so easy to fit in shifts around those rather than an Med / Eng student who have wall to wall lectures.

    Such a big factor. I had mates who could fit 15-20 hours a week in around lectures without working all weekend every weekend while I was pretty much 09:00-17:00 at uni. Plenty of frees for study but a 1 or 2 hour gap is no good for a shift.

    theotherjonv
    Full Member

    It. Was. Instant. Coffee.

    Value brand as well.

    Send her some Coffeemate to go with it.

    And then change the locks, or better move house.

    Cougar
    Full Member

    @thegeneralist

    Been discussing this hugely with the missus. She wants him to use granny’s money to pay off the loan asap.

    I know this is a week-old post but,

    This is a really bad idea and I urge you to resist. It’s not a normal loan. Student debt looks scary and I totally understand the desire to pay it off ASAP, but as debts go it’s about the best debt you can have. You don’t have to start paying it back until you’re earning enough to do so (something like £30k IIRC), and after an amount of time it gets written off even if you haven’t paid back a penny. The government’s own stats suggest that the number of students who are actually going to pay it off is about 1 in 4.

    Literally anything else would be a better spend of granny’s money.

    franksinatra
    Full Member

    Cougar is spot on. If in any doubt, have a read of Martin Lewis posts on this on MSE.

    thegeneralist
    Free Member

    Cougar, Frank, totally agree. That’s why I’m arguing with her about it.

    Oops, just realised I wrote ” discussing” should have written ” arguing”

    Agree with most of what you have written. It may be that he’s going to be part of the 1 in 4. But even so I reckon a house deposit makes more sense.
    Or at least it would if the little shit hadn’t gone to Uni in bloody London….

    footflaps
    Full Member

    Cougar is spot on. If in any doubt, have a read of Martin Lewis posts on this on MSE.

    Does depend what career you’ve chosen, if you are likely to earn enough to pay it all back (eg I would have as an Engineer) then you’re paying interest on a loan as well as the original loan…..

    5lab
    Full Member

    Does depend what career you’ve chosen, if you are likely to earn enough to pay it all back (eg I would have as an Engineer) then you’re paying interest on a loan as well as the original loan…..

    second that. Our grads start on mid-£40s (software engineering, south east) so there’s almost no chance they won’t be paying all of that debt back.

    mefty
    Free Member

    Footflaps is right, if I read it correctly, thegeneralist’s offspring is studying Engineering in London so there is a high likelihood he will be paying back the loan and it would be expensive debt compared to a mortgage. (One caveat I haven’t check the rates as it is not a current issue for me but the Government can be very slow to react to rate changes so may not have picked up recent changes. Second, I don’t know how easy it is to repay early, I remember Vince Cable wanting to make it difficult, which means a wait and see approach would not work.)

    doris5000
    Full Member

    second that. Our grads start on mid-£40s (software engineering, south east) so there’s almost no chance they won’t be paying all of that debt back.

    Depends how quick they progress. Right now, someone on £45K would repay £1800/yr. Interest, in 2023, for someone on that wage, on an average student debt of £50K, is £3,650.  But yes there’s a decent chance they would at least pay £50k in repayments over their career.

    (Historically, interest for higher earners since 2012 were more like 5-6%: on a £45k the repayments would never cover the interest). So yeah, more expensive than a mortgage.

    The average salary for a person with a degree in the UK is currently around £38k, according to statista. So the average graduate is unlikely to repay the full capital amount, never mind any interest, before the debt is written off.

    I’ve said it before, but Student Loans (especially post-2012) are horribly unfair on the young.

    One caveat I haven’t check the rates as it is not a current issue for me but the Government can be very slow to react to rate changes so may not have picked up recent changes.

    Pre-pandemic, interest rates for people earning over £40k were RPI+3%.  But since inflation went mad it’s capped at 7.3% as the optics of making students pay 14% on tuition fee debts was deemed too damaging even for this government

    footflaps
    Full Member

    I haven’t check the rates

    HMG have changed the rate at zero notice and probably will do again.

    The fact that so many people don’t ever pay it all back means they have to make more money (in interest) from those that earn enough to pay some of the loan back.

    https://www.theguardian.com/money/2023/apr/25/record-48bn-interest-added-to-student-debt-in-britain-last-year

    matt_outandabout
    Full Member

    The fact that so many people don’t ever pay it all back means

    …Uni is not worth it?
    🤔😉

    reeksy
    Full Member

    My dad sat me down in the summer before uni and we worked out a rough weekly budget. I did have a grant and a small scholarship, but he topped it up so I could focus on ‘study.’ I left uni with no debt. I wasn’t loaded by any means but it meant I learnt to live to a budget and have done so ever since.

    If my kids want to go to uni I’ll do the same with them.

    onewheelgood
    Full Member

    If my kids want to go to uni I’ll do the same with them.

    It’s great that you have a spare £15k per year per child. Very, very few families in the UK can afford that.

    <edit> Actually, £15k would only cover fees and in most places not even the rent. So you’d still need to fund subsistence, clothing and travel on top. Even fewer families could afford that. </edit>

    anagallis_arvensis
    Full Member

    Uni is not worth it?

    Depends what you value in life

    thegeneralist
    Free Member

    It’s great that you have a spare £15k per year per child. Very, very few families in the UK can afford that.

    Agreed. If only the government would come up with a scheme to pay uni fees centrally and then get the applicant to pay money back over a period of time…🤔

    franksinatra
    Full Member

    My dad sat me down in the summer before uni and we worked out a rough weekly budget. I did have a grant and a small scholarship, but he topped it up so I could focus on ‘study.’ I left uni with no debt. I wasn’t loaded by any means but it meant I learnt to live to a budget and have done so ever since.

    I assume you didn’t have fees to pay, and you do know that grants are no longer available…

    We are fortunate being in Scotland so fees are paid but my daughter still has £5k p/a on rent and modest living costs of £2-3k p/a. This is more than her loan.

    poly
    Free Member

    Literally anything else would be a better spend of granny’s money.

    I’ve not done any modelling to see if that is actually true.  It strikes me that:

    – students with v. wealthy parents may make it through university debt free and thus when they start earning get to keep more of their income.

    – students without parental/grandparent subsidy who get poorly paid jobs (or who leave the UK, become stay at home parents, get sick and are unable to work) will not pay back any of the loan or its interest and thus are better off

    – students who don’t have parental support and rack up a big loan but who earn very well, will pay off the loan in its entirety during their career but not before they’ve accrued a lot of interest on it.  They’ll be comparatively well paid so don’t have masses to complain about but their take home pay will definitely be less that the first type.

    – students who don’t have parental support and rack up a big loan but who earn OK but far from great, will pay interest for a very long time but never pay off the principal.  This group may end up paying more in total than those who earn enough to pay back quickly.

    doris5000
    Full Member

    students without parental/grandparent subsidy who get poorly paid jobs (or who leave the UK, become stay at home parents, get sick and are unable to work) will not pay back any of the loan or its interest and thus are better off

    Yes. This includes the average graduate, and indeed anyone whose career average earnings up to the age of 50ish is below about £45k. They’ll pay back less than the principal and thus be better off putting granny’s money into something else.

    students who don’t have parental support and rack up a big loan but who earn OK but far from great, will pay interest for a very long time but never pay off the principal. This group may end up paying more in total than those who earn enough to pay back quickly.

    Yes, people who earn in the £60k -70k range will pay back absolutely shitloads but never quite clear the debt. These are probably the people who’d be most likely to benefit from using granny’s money to pay their student debt. But even then, putting that into a house deposit might still be a better move, long term.

    doris5000
    Full Member

    the boffins at WonkHE sometimes point out (slightly tongue in cheek) that perhaps the fairest way of funding HE, if we do insist on doing it this way, is to yank up the tuition fees to an absolutely ridiculous level.

    Because currently, someone who earns £70k will pay back far, far more in interest than someone on £150k. So it’s not really very progressive. And, for that person on £70k, it doesn’t really make any odds whether tuition fees are £9k or £999,999 – they’re just going to pay an extra tax for 30 years either way.

    However, the prospect of £100k tuition fees probably wouldn’t go down too well in polling!!

    theotherjonv
    Full Member

    You don’t need to model it, Martin Lewis is way better at this than most of us and has already done it in the video I linked before.

    https://www.moneysavingexpert.com/students/student-loans-decoded/

    Basically, if you’re unconscionably rich and paying off the loan barely dents then yes do it (if you already were, you presumably wouldn’t take a loan anyway, if you won the lottery and banked £12M overnight then maybe worth doing. But WGAF about a few thou in interest only. Also if you retire and don’t actually earn and get payroll, does that mean you can dodge it as well…..hmmmm)

    Otherwise then yes, you are paying interest and at hefty rates too, but equally your repayments are capped in the sense that eventually they’ll get written off unless you earn enough, and earning enough is in most cases linked to having ‘a good job’ (let’s not) which is linked to having a degree (let’s not either)

    But even then, putting that into a house deposit might still be a better move, long term

    seems to be the outcome if you can then offset paying rent against owning your house. Assuming owning a house is a sound decision in future (may or may not be)

    arnoldm
    Free Member

    A few may not like this but, my son and his girlfriend did 3 years at Nottingham University supported by their part time jobs at McDonalds, admittedly a few years ago. McDonalds were/are a pretty good employer with very flexible shifts which worked well for them. We did a little bit of adhoc support but not much.

    Both graduated and have very good careers well away from fast food.

    Best will in the world, students won’t be studying all day every day, a job gets young people ready for working after graduating.

    squirrelking
    Free Member

    admittedly a few years ago

    Clearly. For absolute clarity could you quantify that further? When and how much of their debt did it offset? Because I have a feeling those jobs wouldn’t even touch the sides these days.

    MoreCashThanDash
    Full Member

    Plus, as has been mentioned above, if students have 30 hours contact time across 6 days, that needs preparation time on top, or their schedule splits contact time all over the place, even flexible employers are going to struggle to offer anything remotely useful

    footflaps
    Full Member

    Plus, as has been mentioned above, if students have 30 hours contact time across 6 days, that needs preparation time on top, or their schedule splits contact time all over the place, even flexible employers are going to struggle to offer anything remotely useful

    Which is why some unis are now scheduling all the contact time into 2 or 3 solid days, to facilitate part time work.

    https://www.theguardian.com/education/2023/aug/26/uk-universities-offer-three-day-week-to-let-students-find-part-time-work

    MoreCashThanDash
    Full Member

    Which is why some unis are now scheduling all the contact time into 2 or 3 solid days, to facilitate part time work

    Which is great for students who get that, and that could be a real selling point for unis who can offer it.

    footflaps
    Full Member

    I assume it will just become the norm as it would be such a big differentiator….

    matt_outandabout
    Full Member

    Or of course universities could also go full time on study, thereby reducing degrees to two years instead of the current 3 or 4 years…..

    Oh, silly me, university isn’t about the students or indeed getting them into the world of taxpaying full time work is it?

    slackboy
    Full Member

    When and how much of their debt did it offset?

    That’s not really the point. Most families will have to find the cash to top up their children’s finances to the full maintenance loan value (it starts tapering at a household income of £25k and reaches the floor at about £5Ok), that means people on quite modest incomes (£25k per parent) will have to find about £500 per month to make up the difference.

    If the student can work part time to contribute to some or all  of that then it’s a real help.

    Not to mention that hall fees are going through the roof at the minimum maintenance loan doesn’t go anywhere near covering them.

    MoreCashThanDash
    Full Member

    Really intrigued by some of the costs being bandied about. Obviously lucky that Jnr got into Cambridge but never thought it would be one of the cheaper options.

    reeksy
    Full Member

    It’s great that you have a spare £15k per year per child. Very, very few families in the UK can afford that.

    Well obviously. My point was about learning to budget.

    I’m so grateful for the support I had that we’ve been saving for the opportunity to do the same for our kids since they were born.

    I was lucky to go to uni before fees started. I’m not in the uk,  but things are at least as expensive in Oz for uni.

    poly
    Free Member

    Dorris, you are talking 60-70k would not pay back in full, but interestingly on the latest scheme MSE is saying “ it’s predicted 70% of graduates who earn £35,000 by the age of 30 will likely clear the loan in full so pay all the interest.”

    the two statements might not be contradictory, but it’s certainly far from clear.  I’d expect a teacher to hit about 35k by 30, but excluding inflation not that many teachers will get to 70k.  I think anyone doing this really should model it for themselves to consider what ifs – like “what if I took 5 years off earning to have kids” racking up big interest but then went back to a high paid job? Or what if I delay earning real money by doing a PhD for 3+ yrs but then increase my earnings as a result (not all phd’s earn more).    Of course if you are smart enough to do a PhD then you would be able to model scenarios like – what would that money do to my mortgage deposit and therefore interest I might pay on that over 25 yrs etc.

    doris5000
    Full Member

    It’s a shame he doesn’t show his working! I think that assumes a solid rate of salary progression thereafter.  Currently everything’s in particularly bad shape but pre-pandemic, interest rates were, on average, between about 3% and 6%, depending on salary.

    Someone on 35K is roughly in the middle, let’s say 4.5%. Average debt on graduation is currently £46k, so in ‘normal times’ interest is about £2,000 a year.

    The repayment threshold is currently £27,295. So someone on £35k repays of £693 pa.  The debt is accelerating away from them at over £1,300 a year.  So I just don’t see how that person gets to earning enough to pay the debt!

    Because the interest rate rises with salary too. At £50k, you’re on the top rate of interest, which pre-pandemic was about 6%. So that’s £2760 a year on the average debt.  You’d need to be earning £57,961 pa from graduation, just to cover the interest.

    doris5000
    Full Member

    I’m gonna have a sift through some more stats!

    mert
    Free Member

    Best will in the world, students won’t be studying all day every day, a job gets young people ready for working after graduating.

    Weird, my “easiest” year of Uni was my sandwich year, where i only had 37.5 hours a week of work. And got paid £4 an hour.

    Many STEM degrees will be all but full time work.

    doris5000
    Full Member

    I was out of date! Those numbers were right for students already at uni or post-graduation. Students starting this month (and onwards) will be on the new plan 5 loans. Key differences:

    Student loans are now written off after 40 years, not 30 as previously. 😖
    Repayment threshold is reduced to 25,000
    Interest rates are reduced to just RPI

    The latter point means that average debt on graduation is projected to be about 43k, rather than 46k.

    So our 35k earner is now paying off £900 a year, and the interest at 3% RPI is around £1,300. To cover the interest you now ‘only’ need to be earning £39k.  Which sounds a lot more doable. Especially as it’s now over 40 years….

    MoreCashThanDash
    Full Member

    Interesting article that follows on from what we have been discussing. The idea that unis could try and timetable to free up practical working time would help, but surely better if stidents could concentrate on study and not have to work.

    BBC News – Working part-time at uni risks worsening inequalities, warns thinktank
    https://www.bbc.co.uk/news/business-66922452

    anagallis_arvensis
    Full Member

    BBC News – Working part-time at uni risks worsening inequalities, warns thinktank

    No shit Sherlock says anyone with a functioning brain cell or 2

    mrdestructo
    Full Member

    Last time I was inperson at uni, for postgrad, I watched as a certain demographic of students worked way more hours than they were supposed to. They weren’t doing it to pay rent, fees, books, food, etc. Their parents covered all that. They worked to lease cars, travel, whatever.

    I started that year as a full-time student. Got asked to do some part-time work away from home (had to board) midway through (rota’d 1 week out of three on a training program) I was asked to cover all 3 weeks out of 3 on the next session due to staff attritition. I’d started reading early and was close to putting everything together. Towards the end of the course I was a bit stressed, but completed. Working really ate into reading time. I received an education. I could have done better. But I’d done better than undergrad.

    From this experience i struggle to gauge how anyone could work whilst full-time studying. It’s not just the contact hours with many courses, but your own reading which could be 2.5-3.5x your (lets say 12) contact hours. If you’re doing 30-54hrs study, commuting twice a day (for uni and work), then you’re going to have issues. I had students on my course doing 25-30hrs work a week and still travelling. Which meant no personal reading time, only class time. Where they’d sit there wide eyed, unable to input to individual or group work. And half of that demographic didn’t graduate (according to the graduation list online in the local rag)

    I’m now working full-time, whilst studying postgrad again, part-time over several years. I moved from a job where I was working 5-6 days a week, to one which is more 3.5 days, although this one leaves me physically exhausted similar to the first one where I ended up physically and mentally exhausted and it was a struggle but I got a pass. Now I’m starting year two and will be very careful with my scheduling and see how it goes.

    Education changes you. If you work too much and don’t receive an education, don’t develop, then that may really hamper your job chances in future when all you have to show for it is a certificate. If the government is trying to encourage learners to work part-time, unis changing their class times to encompass it, then we have a system where people get certificates, not education, and we shouldn’t be doing this to half our youth. Don’t need to mention that the loans they have to pay back will be stress and disappointment in their future.

    TheBrick
    Free Member

    Best will in the world, students won’t be studying all day every day, a job gets young people ready for working after graduating.

    Depends on the course plenty of science and engineering courses are 25-35 a week contact but remember is is spread out over the week so plenty of one / two hour gaps that you can grab a little study in but an hour gap is frequently hard to get much done in so in uni for usually 40hours a week plus extra study for the course to fit in plus travel etc and it becomes very hard to work term time. Only people I knew that worked in term time where on arts degrees with much lower contact time and hence flexibility.

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