University – funding your offspring – what are you doing ?

Just wondering what others are doing ?

Our lad will get the minimum loan, so we are paying all his accommodation & letting him use the loan as his to spend on food, drink & drink, books & drink.

Do you reckon the loan is enough to cover living costs (in Newcastle) or will he need subsidising ?

It’ll be tight but we reckon it’ll just be enough if he’s sensible.
Of course he reckons he’ll need more.

We discussed this on here recently but we did the same, they lived off their loan with us paying accomodation and utilities. They where quite well off relative to many other students. They worked in holidays, one worked during term time which we didn’t like as distraction but it was mainly shop work on a Sunday so reasonable pocket money and shorter hours than Sat.

I’ve got a couple of years to go but probaby she will get teh full lot of loans and we’ll help her repay the rent bit. I cant afford her rent and my mortgage.

shell have to get a job but this is fairly normal.

Mine worked there way through and used the loan. Kept them focused and within budget. I had three and couldn’t afford to pay for all of them.

They worked hard and the upshot was they attended their lectures because they were paying whilst many didn’t. I think it also helped to limit their spending because when they weren’t studying they were working part time.

My middle son didn’t go to uni after A levels but put himself through when he was 24 to become an optician. Great success for him as he found a job enjoyed.

I never pushed them towards Uni after A levels. For some like my middle son it wouldn’t have worked at 18 and would have been a waste of time. He simply didn’t know what he wanted to do. He wasn’t ready. I also strongly believe in learning at the right time through your life.

Your question maybe isn’t about money your wondering about motivation and success.

Fully funded by mum and dad, plus donations from close family.

I was thinking about this recently, when a recently graduated young colleague said that his student debt was £40k.

Fortunately I’ve got 16 years before my daughter starts Uni (assuming she pursues that path), but by then £40k will probably be £80k which means I need to start putting away £400/month if I’m going to pay for it !!

And if we have a SJJ2 it’ll be £800/month….

Hopefully uni will still be free up here, I’ll just have her rent to pay. May look into buying a flat wherever she goes, if she decides it’s uni for her…

deleted

Fortunately I’ve got 16 years before my daughter starts Uni (assuming she pursues that path), but by then £40k will probably be £80k which means I need to start putting away £400/month if I’m going to pay for it !!

And if we have a SJJ2 it’ll be £800/month….

Think of it as a targeted and hypothecated tax, you never have to worry about repayments as it’s all taken out via PAYE. So paying kids uni fees is really just giving them a pay rise once they start earning. Only they will only have to pay ~£200/month for ~40 years Vs your ~£800 for ~10. The rates are better than most mortgages so you’d be better off paying that off then paying your kids AFTER they finish uni and your house is paid off if you still want to.

by then £40k will probably be £80k which means I need to start putting away £400/month if I’m going to pay for it !!

Why pay for it?

It’s not like they are running up credit card debts, is it? It’s hardly draconian repayment terms!

If you’re going to save up, better to give them cash for a house deposit when they’re 25 I reckon.

Only they will only have to pay ~£200/month

They will?

They will?

I haven’t got my P45 to hand, but that’s about what my repayments were. Just an example, depends on your earnings (and I was on the ‘old’ repayment system with a lower threshold and lower percentage).

Minimum loan pays for accommodation and £360/month from the Bank of Mum and Dad is for living expenses. He has worked a little over the summer for luxuries so has some savings too. Fees are paid by the standard never-to-be-repaid Government system.

I haven’t got my P45 to hand, but that’s about what my repayments were. Just an example, depends on your earnings (and I was on the ‘old’ repayment system with a lower threshold and lower percentage).

on the new system (post 2012), if you’ve got an average debt of £45K, and you’re earning enough to repay £200p/m (around £48K/yr), then the interest accrued will be something like £182p/m*. So you’ll never make a substantial dent in the capital at that rate. And you’ll be on an effective marginal tax rate of 49%.

But it’ll be written off after 30 years.

.

*based on this year’s inflation rate

“Why pay for it?“

Because I’d rather she didn’t start her working life with a massive debt, and with a bit of planning I might be able to do it ?

FWIW I went to Uni in the crossover period between grants & loans, and long before tuition fees, so it was fairly cheap. My parents helped out with a small top up so that I could get by without taking a job during term time, and I worked in the LBS during the hols. My total debt at the end of it was only a couple of grand.

Because I’d rather she didn’t start her working life with a massive debt, and with a bit of planning I might be able to do it ?

But it’s not a ‘loan’ though. It’s a tax (even more so under the new system where repaying it is increasingly unlikely unless we go into hyper inflation)

I’ve been made redundant, the payments have stopped, just like tax and NI.

My mortgage hasn’t, that’s a loan! (and a scary one at that).

But it’ll be written off after 30 years.

In other words, paying for your kids uni fees rather than taking the loan is madness, to make money all you’d need is the rate that they pay it off to be less than the interest you’d generate on ~£45k in the bank (which should be easily achievable in the long term).

It’s your decision, but all you’re doing is giving the government money, because graduates (at the moment) are unlikely to ever pay it.

no course fees here in Scotland, and the student loans aren’t means tested anymore. Daughter graduated in the summer there from Edinburgh – worked in a bar/restaurant and Starbucks the whole way through, left with about £15k of debt. Off in Netherlands doing a Masters now, but she managed to earn best part of 6K of the 10k she needs, so we are funding the balance.

Think of it as a targeted and hypothecated tax, you never have to worry about repayments as it’s all taken out via PAYE.

Only you have to worry about the fact that as it’s taken out at all, you don’t have the money for things like, I dunno, saving for a house deposit…

Now in 2nd year. Eldest gets some bursary and some loan (this in Scotland). That pays for accommodation, books, shopping and some non-essentials. There is a small external income but nothing much.

He gets by on that. There is an academic bursary he gets, as well, but he’s saving that for any potential assignment abroad. Seems to manage OK. Obviously if things got right we’d help him out. No external jobs or anything.

“In other words, paying for your kids uni fees rather than taking the loan is madness…“

Hold on, that’s not quite what I said ! I wasn’t clear though. Taking the loan when it’s cheap money is sensible, of course, clocking up lots of interest later on is not. So I’d plan to cover the repayments while the interest rate is less than I’m making from wherever I’ve put the cash, and once she’s earning loads and the rate shoots up I’ll clear the lot. But that’s all based on the current system. It’ll be quite different in sixteen years’ time no doubt. Having a war chest in place will give us options.

Unless she turns into a massive brat as a teenager, and out of spite I spend it all on a midlife crisis and buy myself an Aston Martin instead.

My daughter will effectively been on her own. We can help out a bit, but not to any substantial amount.

We only have one son, so easier than 2 +, but we are thinking about buying a house to let out. Obviously he would have 1 room, and bleed his mates dry of rent 😀

Mine are soon to be 8 & 4. Both have child investment accounts which we opened from birth. Then eldest is currently valued approx £10k, so its done ok. We also put any money they get for birthdays etc straight into child bank accounts.

I’m merely hoping they both turn 18 with something to help them along their path it bit.

My son’s living at home while studying at the local Uni (at least in the first year). He does casual work but otherwise will be ‘living’ off his loan.

Perspective from a fresh (ish, 2 years out of uni) graduate.

I got no help from my mum, apart from the odd £30 here and there to help with shopping etc. I did get every loan/bursary/handout going due to my mums income. I had a job over easter and summer to help save me some money.

I came out of uni with god knows how much in student loans debt (although this doesn’t bother me in the slightest for reasons mentioned in previous posts) but I was using all £2k of my student overdraft. Definitely wasn’t a fun wait while my first paycheck came in that’s for sure!

Mine are soon to be 8 & 4. Both have child investment accounts which we opened from birth. Then eldest is currently valued approx £10k, so its done ok.

This is what we’ve done with ours. If in 16 years time she wants to go to uni, we’ll help her out as much as we can with it. If she doesn’t want to go, or fees have returned to a vaguely affordable level, then we’ll keep schtum about it until it looks like she’s serious about buying a house or similar grown up investment. $50/pay packet and 18 years of compound interest appear to look quite healthy for her.

We paid the accommodation for our two girls, but would do it differently if we did it again. The first one went to Bristol and in the final year commuted from Taunton or was on placement, and the second went to Plymouth and spent most of her time on placement near us or staying at her boyfriends. It would have probably worked out cheaper them to stay in a hotel for the times they were actually at uni. 😕

So I’d plan to cover the repayments while the interest rate is less than I’m making from wherever I’ve put the cash, and once she’s earning loads and the rate shoots up I’ll clear the lot.

I may be wrong but I was under the impression early repayments had been stopped.

I’m planning on murdering the MIL when/if junior passes his A levels. Been paying £30/month into a shares ISA for him since before he was born…wont touch the sides of the fees!!

None of these financial conundrums ever crossed my mind whilst getting jiggle with Mrs ws. I’m still hoping rolls Royce come up with some kind of in house degree requiring sports management and physio in the next 4 years 😆

One of mine starts next year. Student loan / tax will cover tuition fees, the means tested maintenance will be just under price of accommodation. We will have no choice but to tighten belts to make up the shortfall for living costs.

We have been putting £15 pcm into the child trust fund (thanks Tony) and then monthly savings for each, and a bond. Hopefully it’ll be enough for a good house deposit where they go to study.

One of mine has just graduated, close to £50k debt. 5 years or so ago when we were looking round the various unis; we mentioned, in passing, fees/debts to a youngish lecturer and the fact that we would be helping as much as we could to keep her debt low. We were quickly put on the right path. Take the max living costs loan and tuition fees and any money we may have put into the pot, use for other things once she graduates and starts work. She started work recently and is paid below the £2k threshold but would struggle for years to save for a deposit for a house. She loves the work and may end up in a loved but low paid job for years. The money we would have given to pay fees will go towards deposit which we feel far better about.
She doesn’t even think about the debt, she views it like most others as a tax that may or may not be paid back. If she starts to earn very well, she may pay it all back but will have sufficient to live with, with what is left each month.

Son starts at York tomorrow! Tuition fees will be his. Most of his bottom tier loan will be for accommodation. We will top up where we can, but he will need to get a job to top up income.

Slightly different perspective – I’ll be off to uni tomorrow morning.

Because the student loan company didn’t want to take into account the lump pension sum that we got when my dad died, they’ve calculated it on just my mum’s income, so I’ll end up with the maximum maintenance loan. And my mum’s agreed to help me out so long as I keep racing seriously – if I give up the training then I’ll have to get a job.
To be honest I’m incredibly lucky, compared to my girlfriend whose loan doesn’t even cover her accommodation, and her family can’t really help her out that much.

What’s with all the bank of mum and dad bailouts. Learn the art of their own money management, I won’t be chipping in no one helped me but they could have and it made me learn to stand on my own two feet.

Buying houses and flats for them? Really? That some sort if willy waving.

I have too many kids to help any of them, so made it clear to them as soon as they were old enough to understand that they could certainly go to university, but they were not going to get anything other than moral support.

It may make financial sense for our son to take a loan, but both my wife and I left university with zero debt, so I don’t think it’s unreasonable to want the same for our son.
We’re lucky in that our house is paid for, we don’t do holidays or iphones, and the current interest rate on savings doesn’t make saving worthwhile.
He’s doing a masters, so 4 years plus a year out, so maybe £60k in loans. I can’t imagine starting work with that on my back, even if it takes years to pay off.

Back in the ‘good old days’ when education was a right, I got about £600 a term grant (with no fees obviously). So £50 a week half of which went on accommodation.

Adjusted for inflation (exactly double) that was £100 a week, leaving £50 for food and entertainment, which worked out OK if you stuck to beans on toast and bottled cider from the offi.

These days accom is about £115 to £150 a week on campus. Have no idea what the average living costs are, be interested to hear from students. And how many hours you’d have to work to make up the shortfall.

We have child investment account. Any money given for birthdays etc props it up.
In fact ,we callously asked the grandparents etc to stop buying so many grand toys in favour of a smaller one maybe and a uni donation… Cheeky ,but hey ho.

Paid rent for one, currently paying rent for the other. Minimum loan. Was a bit of a stretch in the overlapping year, but I can’t complain; minimum loan does mean way above average salary after all, and it’s my choice to have the finances I do. Anyway, I am confident they will both be able to pay their loans back relatively quick.

I’m just thankful we were done before the inevitable fees arm race. I pity anyone with kids at school now. Start saving.

My twins start today (Saturday) and Wednesday. Loans for tuition and maintenance, and I’ll pay their accommodation. All my financial planning centred on getting the mortgage paid off before they started, and by overpaying we got it finished early. Then I got a reasonable inheritance and I’ve just retired so have a decent lump sum on top of that. Both have worked since they were 15/16, and this summer they have put in a lot of hours to work up a decent wedge. They will continue to work a day or two a week each to boost their funds.