Tales from the Squeezed Middle

(93 Posts)
Xenia Sat 04-May-13 08:37:37

Article in today's Weekend FT.It does look as if the Durham couple in the article below (see a forthcoming R4 programme mentioned at the end) are being a bit foolish. Their daughter with her Cambridge degree can pay back her student debt during her life. No need to sell their home when they have 2 other children too.

"First Person: Caroline Beck

As told to Rosie Millard
The struggling freelance writer says she ‘can see the abyss’

We’d always thought of this house as being our pension. It was derelict when we bought it 14 years ago, we have done everything ourselves; the painting, the flooring, the garden … But we need that money now. I can’t think of any alternative but to sell.

Roisin, our eldest daughter, has been offered a place at Cambridge university. I can’t bear the thought of her being saddled with huge debts, so we will sell up and live in rented accommodation.

I am a freelance writer, my partner is a wine merchant. Lots of people here in County Durham – architects, graphic designers, photographers – are going through the same thing. We all used to be OK. Some of them now have no work. I am still working but I can always see the abyss, my toes are reaching over the edge.

Six years ago both the children played the piano, one went swimming and my eldest daughter had singing lessons. They don’t have any lessons any more. It’s my youngest daughter Eve’s birthday next week. She hasn’t asked us for anything. We won’t give her a party because this week we had three catastrophic bills: the exhaust fell off my car yesterday; our oven blew up at the beginning of the week; and, last month, the lights in the kitchen fused.

IN FT Magazine

The Inventory Felicity Kendal
My father, the good Nazi
A hire truth
Too uncool for school

We look at our finances every day to find out where the money is coming from. For the last two weeks of each month we live off a lot of lentils and chickpeas.

I make my own bread because it saves me £10 a week. I make all my own cakes because if the girls take a slice of it to school, they won’t spend £2 on a muffin. So much of my time is devoted to domesticity. And I find that boring.

For six months I have not been out of this jumper. I wash it. I put it on the radiator. And then I wear it the next morning because it’s the warmest thing I possess. We all have one pair of jeans, and we do the same thing. We also save by not having the heating on much.

We used to take really flash holidays. But when we went to Europe last year, we stayed in hostels. We would have breakfast in the morning, then we wouldn’t eat again until the evening.

Recently I had a voucher for £7 off my weekly shop. I gave it to the shop assistant at the till and she told me it was out of date. Although the date on the voucher said it was in date, the scanner was saying it wasn’t. So, I am standing there with my shopping … my kids are saying “Oh Mum!” There are people standing behind me, but I don’t care: I want this £7 off, because £7 off is £7 off. I never would have done that eight years ago. I would have thought: “Oh that is a crazy woman in the supermarket.” I dug my heels in, and, in the end, it got knocked off.

I went to university in the early 1980s when we were told that our generation of young women could have it all. And I did think we could have it all. I thought I could have a career. I thought I could have children. I thought I could have a cleaner and go out occasionally. When I was 21, if somebody had fast-forwarded my life and said “That’s what you will be doing”, I would have said: “No, no, no. That’s my mother’s generation, I will not be doing that.”

It won’t bother me not owning a house.

What bothers me is getting us all through the next decade, so we can get our children to a point where they are self-sustaining. Right now that seems a long way off. We are not living in a Victorian novel. We are healthy, we are happy, we are together. But I can’t see an end to it. I don’t know how they are going to ever afford to buy a house. They are going to be living in rented accommodation for the rest of their lives.

At the end of the day it’s a house. It’s a house that we have done up and we love and we have been really happy here. But it is just a house."

“Tales from the Squeezed Middle”, by Rosie Millard, will be broadcast on Radio 4 on Monday May 6.

LadyIsabellaWrotham Sat 04-May-13 08:45:42

That family need to read MSE. Martin Lewis is excellent on the foolishness of paying for tuition fees up front rather than taking out a loan.

Hassled Sat 04-May-13 08:50:31

I agree - that's insane. My oldest DCs have massive student debts - I wish they didn't, but there was no way either their father or I could have paid the tuition fees and the living costs. We contributed what we could and bailed them out when things were tight; otherwise they worked every holiday and dealt with the debt.

Selling the family house would not have been a viable solution.

alreadytaken Sat 04-May-13 08:55:36

student loans are fine for the poor and at Cambridge for those just above it but this person is talking about being squeezed middle. I'd guess they are above the cut-off for student finance so will have to fund their daughter but have a big mortgage on the house. So they sell and rent or buy a smaller place. There is an issue for students not being able to borrow enough to live on.

senua Sat 04-May-13 08:57:38

I make all my own cakes because if the girls take a slice of it to school, they won’t spend £2 on a muffin.

Sorry. Had to smile at that. It's all a bit Marie-Antoinette. If things were really that bad then there would be no cake - homemade or otherwise.
I can't feel too bad for people who 'used to take really flash holidays' but who, for some inexplicable reasonhmm, are now skint.

And the first family -selling their house to go into rented - are bonkers.

LadyIsabellaWrotham Sat 04-May-13 09:22:42

If she's that hard up then her daughter would get a maintenance grant, and a Cambridge bursary alreadytaken.

I agree that there can be a problem with middle income families struggling to pay the living expenses top-up (although they have presumably previously paid for all their child's food, clothes, entertainment, phone, travel etc, so as long as the universal 65% living expenses loan covers the rent and leccy then the rest should normally still be affordable at a stretch).

But this woman is talking about selling the family house simply because she doesn't want her DD to take on a student loan, which is utter madness.

Numberlock Sat 04-May-13 09:48:08

A fool and his money are soon parted.

senua Sat 04-May-13 10:03:08

oops. Did I not read that properly? With the break in the middle, I thought that we were talking about two different families. Are they really selling the house to finance DC1? What happens when they get to DC2 - what's left to to finance her through University?

As to the comment "it is just a house": wait a few years until the landlord ratchets up the rent or refuses to renew the agreement in the middle of GCSEs. I don't think that she properly appreciates security of tenure.

Numberlock Sat 04-May-13 12:22:15

How will they afford rent when they retire? Mind you, the FT is hardly a barometer of average people's lives and finances.

Numberlock Sat 04-May-13 12:27:19

There is an issue for students not being able to borrow enough to live on.

Couldn't agree more. Boils my piss that the maintenance loan is means tested.

I suppose we might be classed as squeezed middle. DH is retired so while we are not poor our ability to save is reduced now.

DS1 is 17. He would have got EMA until a year or two ago but that has gone for all but the poorest. He hopes to do a 4 year MA course. I was feeling sick with the prospect of him coming out of education owing £60k+ having been brought up in a family where you don't borrow you save up first.
However I have come to terms with thinking of it as a graduate tax, with the help of Martin Lewis.
His advice is that if you have the financial ability to help out your children then do not pay off their loans, use it to help them after uni, for example with deposit for a house.

Xenia Sat 04-May-13 15:29:11

I just don't understand it. So you can borrow the £9k fees. There is no need for parents in the position she is in to raise the fees themselves. Then assuming incomes of parents are reasonably high they get a £4300 a year maintenance loan. If you live at home (and she lives in Durham so surely Durham or Newcastle university are possibilities) and if her parents buy her food £4300 covers her books.

She instead is going to Cambridge so say £3000 for her rent. So she is left with £1300 from the loan. Most students even fairly well off ones like my children take summer holiday jobs. That raises money to help keep you during the rest of the year. I do not see why she needs to sell the house at all.

I also agree there is no point in paying the £9k a year fees. I have paid my children's student fees because I can and I wanted them to graduate debt free and I can do that plus help them buy flats etc and that's because of my own career choice being fairly wise all those years ago but parents who are struggling really do not need to feel they have to cover this £9k a year. Martin Lewis is right. Also if it's a girl very very sadly the 70% of women who have children do tend to work about 8 years and then never really earn much again and I hate writing that as a feminist but if you looked at so many women on mumsnet their husband earns the lion's shares of money and even if they had a good career until they turn 30 trhey basically give up work and if they go back it is 3 hours a day or charity work. so they may well find they never in their whole lives earn over the £20k or whatever thesehold is to pay any of the loan back as they live off male earnings or move from husband to husband taking divorce settlements as they go. If you are a housewife who has bred a potential housewife then it does not make much sense to pay her student fees.

LadyIsabellaWrotham Sat 04-May-13 15:38:11

It's true that as the labour market currently stands, most women will never finish repaying their student loans. The vast majority of them will pay some of it, but career breaks and subsequent SAHMing/part time work (or simply the decision to do an Art History degree in the first place grin) mean that they'll get a load of it written off at the end of the term.

Which makes me wonder - do you think Kate Middleton has an outstanding student loan?

Xenia Sat 04-May-13 15:49:47

KM? I don't know. Amongst my daughters' friends those of us who are reasonably well off there were difference - some parents think you only appreciate your degree if you have to pay for it yourself and do not fund their children at university even though they can afford to - which is a legitimate point of view; some others took the full student loan and stuck it in an ISA for 3 years; and we just chose to pay all the fees each year which were less than school fees anyway as I would imagine my daughters are likely to be higher rate tax payers for 30 years + and already are in their 20s.

I did not favour the ISA option as you get caught in the student loans company net on their books with all the hassle and admin attaching to that. 2% a year on what was then £3k - let us say 2% x 5000 - let us say you might make £100 or may £300 out of your ISA plan. Just not worth the hassle. Might as well not bother with the loan.

It is of course absolutely appalling that in 2013 there are such male/female differences when 60% of graduates are female. You could argue there is not much point educating beyond age 14 the 70% of girls who will have children if most really never have much of a job or income unless I suppose it helps them hook richer men in the marriage market I suppose in the style of Ms Middleton.

alreadytaken Sat 04-May-13 16:49:16

in reverse order - the interest rate on student loans is now so punitive while they study, and the interest on ISAs so low, that no-one in their right mind takes out the loan and puts it into an ISA. If you are what you claim to be, Xenia, you should know that. Also the woman claims to work but to be worried about it drying up, so your comments about housewives don't really apply.

LadyIsabellaWrotham - if you are above the level for Cambridge bursaries but have a large mortgage, are worried about your work drying up and have other children who may be heading for university soon then you have financial worries. I have no idea if the student can get work in the summer to fund herself but that might be feasible.

Selling a house to avoid paying tuition fees would be mad but I know a number of people taking on extra work to fund their children's living costs.

Xenia Sat 04-May-13 16:51:03

I claim to be a parent of children who do not have student loans and where 3 of the children have graduated. When my older daughter was at university she did have several friends who stuck the loan sum in an ISA. I worked out the sums then and it didn't seem worth the small profit. It may well be the case that now it is certainly no way ever going to be worth it so that shows I was right all along.

Moominmammacat Sun 05-May-13 12:36:09

We can afford to pay tuition fees and living costs up front for our DCs ... but I hate the thought of missing out if they never earn enough to pay it back and am tempted to take out at least some of it. And my DH has a theory than one government, one day, will scrap the whole stupid loans system and write everything off, because it is a costly mess, so I want to be in there. Also, re alreadytaken's point on punative interest rates, I think I worked out that if DS1 borrowed £56,000, he would pay back more than £150,000 ... may as well take out a Tesco mortgage.

Xenia Sun 05-May-13 12:53:18

Now it's £9k a year not the £3k a year I paid for my older one it is harder. I still think I will pay as they probably will earn enough to be required to pay it back.

It might even be a gender issue - parents of girls who are not very feminist with housewife mothers who may never earn very much and are interested in their nails and unlikely ever to earn much and give up at 30 to keep house perhaps should be taking out the loans as they never pay them back. Sons who probably are ilkely to be keeping said housewife type wives if their class or culture makes that likely then it may be for them better to pay their fees for them if a parent can afford it.

Of course as a feminist I wish that were not so and 30% of women never have children anyway but even of those plenty end up kept by men and of those who aren't many never reach the dizzy heights of £20k a year of earnings.

senua Sun 05-May-13 13:14:00

I think that the whole logic is back to front. They should give loans to all - not huge amounts that some might fritter, but enough to live on. The student loan is then forgiven at, say, £1 for every £2 income tax (on earned income) paid to the Government. Thus those that use their degree to boost the country's GDP are rewarded by having their debt gradually chipped away. If you choose not to do this then that is fine but when you die the remaining debt is recovered, as a preferential creditor, from the Estate. It would be an incentive, as opposed to the current system where many are quite blase about relying on the 30 year write-off rule.

funnyperson Sun 05-May-13 14:11:09

Selling the family home is a dodgy decision. A Cambridge education is not worth that much.

Not going on flash holidays and eating lentils and chickpeas describes our family life but we thought we were ...er...normal. City bankers aside, most people give up flash extensions and redecorating to fund education.

However I agree with the notion that undergraduate and postgraduate education, with the concomitant living expenses, post tuition fee hike, are currently priced out of a family budget. I do not agree with Xenia or anyone else who says paying for a university education is doable on even an above average (and in my case very decent) income. I am just lucky that my DC made it through before the hike.

Xenia Sun 05-May-13 16:09:50

senua, I like that plan but that's because my children probably will pay a lot of tax ni due course. Plenty of children do degrees for reasons of loving a subject or commitment to their art and are unlikely to earn much - all those artists and actors etc who one knows will wait tables for life on the minimum wage.. In a sense with the loans system we are incentivising children to live a life post grad or idleness or housewifery or in jobs where they earn very little,. If they use their degree to earn a lot for the state they then have £40k+ to pay back. If they pick a degree which will earn them nothing or they have planned to live off the dole for life or off a man's earnings then we pat them on the back and say there there - you need never pay a penny back.

So I suppose family businesses could ensure the graduate child never earns over the ceiling and then pay them in shares or other capital gains in due course.

Is it doable if you borrow the fees (so nothing to pay now) and take your £4k a year loan? It certainly would be if you lived at home. Of course it is even if you don't take ajob.

So you must be saying it's not possible if yoyu have hall fees to pay. Oxford costs about £3k a year so that leaves you £1k if you do not do a stroke of work in any vacation and have no parental help whatsoever.

I don't agree that a £4k rent/living cost loan plus summer job (plus in some cases family help) means it's impossbile. In fact the scheme under the £9k a year fees you pay nothing for fees until you earn over the ceiling.

Also e probably want to go back to when 15% of children went to university as in my day. I was talking to an academic at Cambridge this week who was despairing of the science students who compared with all foreign students and whether from state or private schools are pretty useless. If only 10% of children went to university or 15% as in my day we could afford more state support, we could return jobs like teaching and nursing and even law to beingnon graduate or part non graduate and children could get on with work from age 16 and by the time they were 21 they would have 5 years of experience rather than keeoping them as kidults well into their 20s.

mummytime Sun 05-May-13 16:24:44

Xenia I actually agree with some of what you say. It is extremely foolish to sell the house to pay one set of fees.
If she took the loan, then if she took a low paid job (highly possible with some career choices or degree subjects) then she will not have to repay, and may never have to repay.
I think the parents should pay a small amount and get some sensible financial advice. Cambridge also is more affordable as it helps its students more.

creamteas Sun 05-May-13 18:10:26

Whilst I agree that it is stupid to sell the house instead of taking out the loans, the problem many encounter is that for many the maintenance loan is not enough to live on. In some cases, it doesn't even cover the rent. It is assumed that families will top this up, but this doesn't necessarily happen.

I see lots of students in real financial hardship because their families are unable (or unwilling) to support them. In some cases, they are maxing out credit-cards and taking out other high-rate interest loans to cover the basics.

Many of them are desperate to get work but there are not enough jobs for students to top with either.Lots of people who would not usually apply are taking traditional student-type work, because of the dearth of full-time work.

Summer jobs are also not as easy to come by anymore. where they do exist, employers often want them to work more months than their university vacation.

I know at least two of my students that started working full-time at Easter as they needed the money, yet this means they could not attend any classes this term. Both are planning on phoning in sick on exam days, as they will not be allowed the time off otherwise. By rights, I should report this, but getting reprimanded by uni, will only make their situation worse, so I'm not going to.

alpinemeadow Sun 05-May-13 21:15:04

Yes, there have been lots of threads here from people about the fact that the basic (ie non means tested) loan doesn't provide students enough to live on; and there are parents who can't afford to pay the top up that the system assumes they will. It's not always easy for students to find summer work or part-time work either, as other posters have said.

I think it will be interesting (that is one word for it!) to see what effect the "you don't repay unless you earn x, and then it is written off after 30 yrs" message has on economic activity - certainly at the margins it may have a disincentive effect. It is an unusual message to give people, that they can borrow large amounts because they can just not pay it back if they don't earn enough! The amounts are quite large proportionate to earnings (9% extra tax) and I think we just don't know enough about how that will affect incentives.

Xenia Sun 05-May-13 21:42:17

alpine, yes it's fascinating how it plays out. It rewards artists and actors and dance students who will never earn much and potential housewives or those who may be going to work in a family business which will not pay them over £20k which is not what was intended although those supporting degrees as a love of learning, academia etc will support that principle and say it's fine the state in effect provides a subsidy for those studying subjects from which they will never make a living.

I listened to this week's Money Box on R4 today and Money Box live and one of those had questions about student finance including the issue above that if you don't live at home (and plenty of students do stay at home) and are not poor then you need a parent or job to make up the difference between the loan element for your maintenance/rent - £4k or whatever it is and what rent you may have to pay. One adviser did say students sometimes pick expensive accommodation and it may be worth looking for further away cheaper rooms to keep within what they can borrow or earn. Some teenagers do save up a bit of money. My children saved all their presents from relatives since they were born and had that to help at university too. Jobs in term time were possible - one worked in a restaurant once a week. I know Oxbridge does not like that and I also know that student jobs are not easy to get. Working with holiday companies abroad was one choice of my child's and those companies need many more staff during school holidays to look after the children so that's worth looking at too. Most also have an over draft.

So suppose to fund teh difference between £4k loan and your rent/travel/food you have:
1. overdraft
2. jobs
3. additional bank loan - if you can get one
4. parental contribution
5. your savings, money gifts during your childhood, paper rounds etc.

If all that fails many can go to university at home and have none of those problems.

So we are talking about the difference between say £4k loan and £7k they might need so £3000 a year. I think from 1 - 5 most of them will be able to raise that £3k if we go on the basis that £7k a year is what you need for rent, food etc.

Baiji Sun 05-May-13 22:06:40

There's such a divide between the 'squeezed middle' kids and the 'full loan, grant and bursary' crowd who are lent / given up to £10k per year. they don't need that much.

From what I hear, the students from low income families furnish themselves with ipads, iphones, head to toe Hollister and are out every night, while the kids of working parents can sometimes barely feed themselves. It's crazy.

Oh, Xenia, I would so love it if your daughters became housewives.

creamteas Sun 05-May-13 22:16:35

If all that fails many can go to university at home and have none of those problems

Assuming that the parents are willing and able for you to stay there of course. If travel costs are high, the home rate of the maintenance loan can be less than child benefit/child tax credits and therefore some parents may not be able to afford to keep their child whilst they are studying.

Not every parent is supportive of university anyway. I have also had students whose parents' refused to fill in the income forms so the maintenance loan can be assessed, leaving them in real hardship.

alpinemeadow Sun 05-May-13 22:26:56

Yes creamtree, I've seen posters saying that living at home is not necessarily cheaper if you have travel costs.
In any case it may be a very false economy - to turn down a place at eg a Russell Group university because it's cheaper to live at home is not an ideal scenario, even if you're just looking at the monetary implications!

mummytime Sun 05-May-13 22:35:22

Oxbridge are against working in term, as terms as so short and intense. However at least the richest colleges, provide accommodation for all or nearly all student, and their students don't have to pay rent for the vacations. Which is a huge advantage.
As well as providing a valuable brand name on your CV.

The stories of poor background students wasting fortunes to the envy of their MC counterparts sound a little apocryphal. Poor background students know that no one is going to bale them out if they end up with debts. They also tend to choose either degrees with good job prospects, or ones they have a real passion for.

funnyperson Sun 05-May-13 22:44:40

Hm. In London, students are up against the rest of the universe for part time jobs, and for affordable accommodation. Living in cheap accomodation far out from the university library leads to long hours spent on night buses, after the library has closed, and isn't necessarily productive. Oxford on 3k might be OK for a first year student but doesn't add up when a full year's rent has to be paid in the second year.
I think students need more than 3k a year to top up their loan, especially London students. I also think it is reasonable for parents to want their offspring to be debt free.

funnyperson Sun 05-May-13 22:48:53

The problem is that whoever dreamt up the student loan system thought that what works in America would work in the UK. It is common for Americans to work their way through college and graduate with debt. But the UK is not the USA. In London, in particular, degrees at UCL will be unaffordable for children of average families, and will alter -has indeed already altered the very nature and fabric of the student body.

funnyperson Sun 05-May-13 22:56:30

All mums are housewives IMO, just that some work in a career too. As a matter of fact I agree with Xenia that young ladies should use their brains and talent and capacity for industry to establish a rewarding and hopefully well paid career, and have the ability to be independent. This is perfectly compatible with being a mother, and indeed with being a married mother. Sorry to sidetrack.
That said, there seems to be a growing case on this thread for working for just under 20k in the family company.........

Xenia Mon 06-May-13 07:12:27

My list of ways of how to top up the £4k loan up to what your rent/travel/food costs is the may most students do manage.

As someone said above those who are from very low income families are given more . Someone said up to £10k a year. I don't; think they need that for rent and food etc particularly if they can live at home in holidays as plenty can even if their parents are in dire straits. Holiday jobs are not that difficult. I was talking to someone with a student daughter adn she works in her local Star bucks near home in London in all university holidays. It is not impossible to obtain holiday jobs although I certainly agree it is difficult in some areas.

(B, if my children decide not to work that is up to them. I have borrowed 5 children and learn as much from them as vice versa and what they decide to do is their decision. One is getting married this year and the other is in her 20s too so those issues may not be so far away and apply to sons too of course as well in non gender biased households).

alpinemeadow Mon 06-May-13 07:43:29

That's interesting funnyperson about the composition of the student body - how do you think it's changed so far?

Someone said further down the thread that their dh thought sooner or later the govt will just write off all the loans as a costly mess. I dont see that happening myself, but 30yrs is a long time, so who knows? If/once those discussions start, that will also create interesting incentive issues while people wait to see what happens at the next election (ie the one in which its an issue). Potential for lots of unintended consequences there!

funnyperson Mon 06-May-13 10:13:11

My perception of the UCL student body in particular is that the students these days almost invariably come from the wealthier (and in many cases very wealthy) families. The average families tend to send their offspring to more affordable places.

funnyperson Mon 06-May-13 10:19:01

Oxford and Cambridge are a lot more affordable due to keeping down student accommodation costs and no transport costs as well as student entertainment and activities are all much much cheaper (a play or concert in Oxford is 10 times cheaper than in London). Therefore the class background of the student body is more mixed than UCL. Imperial is interesting because of the science orientation, so the less wealthy families are more willing to invest hard earned cash, and also at least a third of the student body live at home for part of their degree. LSE is funded by their foreign student intake who are all fleeced by the university fee structure and accommodation market.

TheSecondComing Mon 06-May-13 10:21:49

Message withdrawn at poster's request.

funnyperson Mon 06-May-13 10:28:49

These changes are irreversible. The loan system will most likely become privatised or out to tender. The UK university system will be like the 'ivy league' but without billionaire philanthropy to fund poorer students on merit.

It's one of the main reasons why we don't want to move out of Central London - it'll give DD the greatest choice of universities (or colleges or whatever) without forking out enormous amounts of rent. I feel nostalgic about the loss of the freedom of moving away from home though, and Oxbridge might be a nicer option from that POV.

Numberlock Mon 06-May-13 10:57:14

My dd wants to go to UCL. We're fucking brassic, have absolutely no idea how she will do it tbh.

Is this for October 2013 admission TSC?

TheSecondComing Mon 06-May-13 11:22:47

Message withdrawn at poster's request.

Numberlock Mon 06-May-13 11:25:41

You have my sympathies, I have twin sons starting in October this year. Barely any concession made for more than one child at uni and why should the maintenance loan be means-tested??

funnyperson Mon 06-May-13 11:27:23

I feel quite angry about the issue of student accommodation in London. For example, there is a company called 'Unite' which owns a number of prime central London blocks, which advertises 'affordable' student accommodation which starts at £200 per week. This then sets the bar for the private landlords.

TheSecondComing Mon 06-May-13 11:31:39

Message withdrawn at poster's request.

Roshbegosh Mon 06-May-13 11:33:12

Mad to sell the family home that's for sure. Maybe bring a bit more only in by doing the freelance writing on top of a proper job.

funnyperson Mon 06-May-13 11:33:31

Website here
They offer 8 month (40 week) contracts so are expecting £8000 per student.
If a student wishes to live within walking distance of university in London, after the first year, it is almost certainly the cheaper option to go to Unite (!) But of course many live further out, radically affecting the ability of the student to participate in peer life. It wasn't like this when I was a London student.

Roshbegosh Mon 06-May-13 11:33:37

More money that was supposed to say

Numberlock Mon 06-May-13 11:46:42

TSC - will she be entitled to a maintenance grant and full loan?

MarjorieAntrobus Mon 06-May-13 11:57:36

Have a look at the Student Finance calculator

creamteas Mon 06-May-13 12:01:21

Private halls of residence are common and there are different companies involved. Some are expert at fleecing students. For example, charging an extra amount to pay over the year rather than all-up-front. So do read the small print.

A big way to save money on housing, is not to sign a contract for private renting before the summer vacation. Students rush into finding a house quite early in the year, and end up paying for a house they are not going to use. In most places, there are decent houses to live available in Sept, as long as you are not too specific about what you want. Paying rent for a house you are not using really is a waste of money.

TalkativeJim Mon 06-May-13 12:09:08

She's so cold in the house she has to wear a presumably woolly jumper, but dries it over the radiator every night -so she's got the heating on every night anyway? Right.

Xenia Mon 06-May-13 14:49:29

£3651 ( just checked) is today's price for where I stayed self catering at university owner by the university. So the £4k loan for maintenance will cover the rent in most places and Oxbridge BUT it does not really cover your travel and food etc which is likely to be £3k a year on top of that. So students work in the summer holidays, get an over draft and if they are from less well off homes get a non returnable grant.

The system where if your parents are badly off even if they give you £3k a year because your father works cash in hand as a taxi driver and others whose parents are loaded by pay the child not a penny get nothing is not very fair. It does mean the poor are actually in a better position in going to university than children with rich but mean parents.

TheSecondComing Mon 06-May-13 14:59:34

Message withdrawn at poster's request.

Xenia Mon 06-May-13 15:00:42

I am happy to debate it but do explain. We are saying the shortfall between the loan and rent/travel costs is about £3k a year and that the state gives that to the poor but not those whose parents earn more. How can that therefore mean the poor can afford to go and other teenagers can?

DolomitesDonkey Mon 06-May-13 15:02:38

Let me get this straight. Sob story #1 bought her house (derelict) in 1999 - a full 8 years before the top of the market in Durham. Hazard a guess 100k in 1999. Having paid the mortgage off at rock-bottom rates for 14 years you'd expect the outstanding debt to be around the 50k mark (on a 100% mortgage) - so at reduced interest rates, let's say around 3-400 pounds a month?

On what planet will it be cheaper to rent?

Or, perhaps the family released so much equity out of their home, in fact treating it as a cash machine - that they are now teetering quite close to the edge of negative equity.

2 quid for a muffin? Forgive me, I don't live in the UK and I don't buy such foods, but I'm sure last time I looked in Tesco you could get 6 for a pound.

My sympathy I'm afraid is limited. Rosie Millard is another one who worries more about her floating walnut shelves than how to add up the contents of her trolley!

goinggetstough Mon 06-May-13 15:04:55

Xenia I think the minimum maintenance loan for 2013/14 is £3575 and the room deposit to confirm their accommodation £250 approx depending on the university. So sadly the minimum loan won't cover the rent and deposit in most places.

Xenia Mon 06-May-13 15:10:23

3564 minimum loan for maintenance and the rent I found where I lived at university is 3651. So essentially we are saying the loan covers your rent just about in most places. So children of slightly better off parents only just then have to find their fares and food and clothes/book costs. Surely they can get that on their over draft and from a summer job and life savings even if their parents choose not to pay a penny.

I just do not think it is as bad as people say.

alpinemeadow Mon 06-May-13 15:16:02

the issue of students whose parental income is above the threshold for full funding, but whose parents are unable or unwilling to add the top-up amount they're 'supposed' to, is not new though. 35 yrs ago there were some students in this position as well.

I think one reason there is so little pressure to change it is that for each individual person it only affects them for 3 yrs - they survive (or don't) somehow, but then move on. So even when there was discussion about changing student finance, I don't think this problem really figured in those discussions, did it? It was much more about how tuition fees should be financed. The idea that adults are supposed to be dependent on their parents if those parents earn above a certain threshold was not really discussed. There are arguments for and against, of course, but what's odd is that it only seems to be on mn that it even gets discussed!

Slipshodsibyl Mon 06-May-13 15:16:59

Dolomitesdonkey, I agree. I know our children are facing considerable debt and that it is worrying, but the daftness of the utterances and the solution thought up by the people in the article makes me despair.

goinggetstough Mon 06-May-13 15:20:56

I agree the article is daft. However, I do think that the minimum maintenance loan should cover basic living costs. Plus these days it is more difficult for students to get jobs, not impossible my DD has had one for the past 2 years.

funnyperson Mon 06-May-13 15:31:36

xenia your sums are very odd. My dd lives in a cheap student house in Oxford which costs £87 per week not including bills which is £4524 per year not including bills.

funnyperson Mon 06-May-13 15:33:38

Yes I too think it is odd this only gets discussed on mumsnet, though also a reflection of how out of touch the Govt is that they dont even perceive university education funding as an issue which might affect an electorate.

Xenia Mon 06-May-13 15:47:54

I did just check accommodation at my old university and it was the same as the minimum maintenance loan.

Here is an Oxford college which came up on my quite search juts now about £3k a year.

So we are saying students need to find about perhaps £3k a year over 3 years from parents, savings, over draft, holiday jobs.

If the result is that we return to only 15% of students giong to university, just the brightest of the bright it would be no bad thing and plenty of jobs do not really require degrees.
As the system favours the less well off it is amazing that those are the ones being put off as if they cannot work the internet and use calculators. If they cannot do that I am n ot sure they deserve university places.

I suspect even more common is parents not wanting their children to have big student loans so £9k fees plus £4k = £40k over 3 years will result in your 9% tax. Say they go into a City type job and are on £100k by age 30 that is £9k a year. I think they probably end up paying back at least double what they borrowed as it is compound interest and they are paying that back just as they take on mortgages, weddings, full time childcare costs. You can see why parents would rather the children did not have the loans. If you pay 47% tax/NI plus 9%, nearly 60% of everything you earn is being taken away from you.

mummytime Mon 06-May-13 15:49:11

It always was expensive to be a student in London. That is one reason I as an outer London student didn't apply to London Colleges, it was much cheaper out of London.

But some Unis do seem to be busy replacing affordable and basic housing with far more expensive and luxurious ones. The Universities argue "students won't accept more basic halls nowadays", but for less rent they might. Of course the first place with all ensuite rooms was Robinson college Cambridge, which we used to describe as the conference centre.

It's also interesting how it is the 20th century Unis which have to demolish and rebuild their libraries; Oxford isn't about to do the same.

creamteas Mon 06-May-13 17:22:18

If the result is that we return to only 15% of students giong to university, just the brightest of the bright it would be no bad thing and plenty of jobs do not really require degrees

We have a much lower rate of students in HE than many of other developed countries. If we (further) restrict the numbers in the UK going to university, then graduate-entry jobs will be filled by students from overseas. It is a global-market now, and employers want graduates even if previously they would have been happy with lower qualifications.

The problem is not that university education is unaffordable, it is about policy priorities. Other countries invest in education, we currently (for reasons which I do not understand) do not.

Needmoresleep Mon 06-May-13 18:36:59

The observation that the UCL student body is changing is Interesting. We had already noted that a disproportionate number of the (London) children we knew were staying in London.

The same will probably happen with my son. London is excellent for the subject he wants to study. Other Universities are as well. However as a home student it will probably be easier for him to get a place in London. Less competition from students elsewhere in England.

Obviously it will be cheaper for us. He can live at home and walk to college. However we would like him to experience living away  from home and in another town. Equally it can't be good generally for London kids to stay in London and for the rest to stay well away.

DS is less bothered than we are. He likes living in London and can be confident a number of school friends will stay as well. To his generation University seems to be less about the experience and getting away from home.

Plus Londoners at Oxford and presumably elsewhere are notorious for returing at weekends......

senua Mon 06-May-13 20:18:16

I heard the programme this morning. If I heard right, the DD1 has Cambridge as her CF and UCL as CI. They were saying that they would need to sell the house if DD1 went to UCL.

It is not good that we are going to end up with an ever bigger London v. The Rest of The Country split; London is already too insular.

Xenia Mon 06-May-13 21:52:16

I am sure that is not so. Could they not have their other children share their bed room or use the bed room of the student and rent out her room to pay her something whilst she is away? I think they are just scaremongering.

Yellowtip Mon 06-May-13 22:38:40

mummytime sorry to contradict but Magdalen is doing exactly that (the library thing). The plague pit uncovered during excavations for the new library has only just, after several months, been covered up. They found old wigs from a barber's shop there too. And they had to identify whether or not any skeletons were Jewish because that had an impact on whether or not they could be moved. It's fascinating actually.

mummytime Mon 06-May-13 22:42:42

I did mean the Bodelian, actually. And obviously Magdalen's must have been pretty modern, because my old college one is about 400 years old.

boomting Tue 07-May-13 01:03:32

Bloody bonkers. They clearly have no idea of the student loan system, and their children will probably be much better off in the long term inheriting the house (assuming no protracted care home stays, obviously) than having no student debt.

I get the distinct impression that they have always had quite a nice lifestyle, and there is no mention of redundancy / work drying up. So, if we assume that their income has no dropped substantially (and this is borne out by the lack of mention of any grants or bursaries, though they may just be that clueless) then by making the sort of cost savings that the rest of us do (holidays in hostels / no holidays at all, turning down the heating etc.) then they could quite easily make up the difference between the c. £4000 minimum loan and the c. £7500 you need to live off.

But then again, some people have no idea really - my (very well paid) landlord referred not long ago to a household income of £25,000 being a "pittance". I struggled to keep a straight face.

alpinemeadow Tue 07-May-13 06:54:10

I havent heard the programme, but i thought paragraph 3 of the extract in the op did suggest their earnings had fallen boomting - not made clear, i agree.
I think it's interesting that this issue 'the parent gap in student funding' is now making it into radio programmes - maybe with increased tuition fees (though obv you can borrow the full amount for those!) it will become a more significant and therefore more talked about issue. There is something to discuss about requiring a grown adult to be dependent on his or her parents - though i suppose hb changes are going the same way. (i realise technically you don't have to have parents' momey if you're lucky enough to get a summer job or have savings, but you know what i mean!)

funnyperson Tue 07-May-13 07:03:04

xenia the only person saying students need to find 3k a year is you.
I would say more like £5k a year and more for London.

funnyperson Tue 07-May-13 07:20:47

Also, university cost rises do not equate with brighter people going. Fees equate with wealth, not brains. The wealthy are not necessarily the most brainy. The concept of money=brain is a fallacy of this bling obsessed century.
More scholarships need to be created at the top universities which genuinely cover maintenance costs rather than a nod to books and stationary.
Magdalene college Oxford is a wonderful place. I was there at a classical dance concert the other day and the auditorium was superb, with John Piper tapestries all round the foyer.

Yellowtip Tue 07-May-13 08:02:33

It's way, way older than that mummytime. And to add to your reply, the Bodleian is currently having a shiny new £78m extension built.

I'm not quite sure what your library point is about in any event, but it doesn't seem especially valid smile

Xenia Tue 07-May-13 09:44:19

It was similar in my day - full grants but not if your parents had a certain amount of money. My parents chose to make up the money to the full grant but plenty of parents did not which caused huge problems in the early 80s for children of less generous parents.

I think we are saying the suggestion is students need £7500 for rent and food etc. The rent seems to be about £3500 in many places. What they spend on travel and the like varies and some spend more than others. Just because all your peers may think certainly luxuries are necessities does not mean you need to have the same views. There are a lot of spoilt children out there and one of the best things children can get out of university is poverty and having to make do and walk not take the bus.

boomting Tue 07-May-13 10:14:07

Alpinemeadow - if their earnings have fallen then either (a) the amounts that their offspring are entitled to in the form of maintenance loans / grants / uni bursaries will rise in accordance, or (b) their income hasn't dropped below the ~£60k that means you get the minimum loan.

If it is the latter, then they are just part of the idiot middle class that does not realise that shopping in Waitrose, going on foreign holidays and going for meals out are not necessities. Anyone who claims that they cannot find £3-4000 a year from an income of £60k for their offspring is either (a) lying or (b) selfish in prioritising their material wants over the material / educational needs of their offspring.

This does all stem from the fact that they clearly do not understand the student finance system (and gahhhh - half my working life seems to be spent explaining SF, so I would quite like to speak to these parents personally) so half this discussion is irrelevant to the people in the story in the OP, though still relevant to others.

boomting Tue 07-May-13 10:15:23

Forgot to add - (c) living beyond their means. And yes, having lots of children or a big mortgage is a lifestyle choice!

Viviennemary Tue 07-May-13 10:18:53

Nearly everybody will be in the same boat. These silly stories just don't wash. People just think what idiots.

lydiajones Tue 07-May-13 10:27:50

We won't be able to afford to pay the tuition for our children but I am of the thinking that if they have a loan they will be more motivated to get a good job. We will of course help financially where we can and our home will always be their home for as long as they need it.

MrsBranestawm Tue 07-May-13 10:35:06

Don't pay their tuition! They can get a loan for that. All their peers will get a loan for it too.

If they don't get a good job then they will pay off the loan very slowly, if at all.

MrsBranestawm Tue 07-May-13 10:41:05

Have a look at these pages on the Money Saving Expert website.

OneLittleToddleTerror Tue 07-May-13 10:42:21

Haven't read the entire thread but only the first page.

First, agree with the poster saying the family needs to read the MSE. It's not worth paying for the degree upfront.

Second, learn a leaf from kiwis. We've been paying for university fees since the 90s. The govt has no power on repayment when you are overseas. It's only recently the govt strike up a pact to recover student loan payments from australia. They aren't recovering anything from debtors in the UK yet. They will never get a cent back from those moved to the US. Many of my classmates now work in the US. (I have PhD in engineering. Most of my PhD classmates are in California). A colleague of mine told me he never paid either when he worked in Norway.

OneLittleToddleTerror Tue 07-May-13 10:44:03

The colleague who worked in Norway is English. (Though I do know another from my PhD class that is working in the Scandanavia). It will take forever for the UK govt to work out a bilateral agreeement with all the EU countries. And probably will never happen if we leave the EU.

senua Tue 07-May-13 10:50:31

Do I take it that you didn't hear the broadcast Xenia? It was right up your street.grin Basically, they had arsty-fartsy careers that didn't pay enough to amply provide for their DC. They did muse at one stage about whether they should have 'gone into insurance' but decided that if they had their time again then they would still prefer the type of life they had.

Hard to feel sorry for them really but I am a meanie. DD was only entitled to the absolute minimum student loan and had very little assistance off us (no cash, but things like a Big Shop at the beginning of term). She has financed the shortfall herself, though it undoubtedly helped to have a working Gap Year before she went. It's amazing how cheaply you can live when you have to - she can have a barnstorming night out for £5 apparently!shock
I am very proud of her; she has proved that she can budget, and survive on a limited amount of money. I have no worries about her appearing in the media in 20 years' time bemoaning the price of muffins.

Needmoresleep Tue 07-May-13 12:40:05

You should be proud of her.

There is a huge focus on results in education, but what I want as well, is kids who can wait for a bus patiently, who can solve problems for themselves and not blame others, who can eat a range of food including fish and veg, who dont need "things" to prop up their self esteem, who can budget, and who are essentially nice, interesting, curious and thoughtful.

I would also like them to have an island so I can go and visit, but am hoping Xenia will invite me instead....

I did not hear the broadcast but having your parents sell their home so you can study in London without a loan or without having to take a p/t job does not seem particularly appealing.

Xenia Tue 07-May-13 15:31:52

I will certainly listen to it as it is on my list of things to catch up with. They sound like moaners and are suffering the consequences of their choices (as presumably Ms Millard has done - having to send her children to state schools because she chose to be a journalist not something better paid).

I agree there are lots of reasons not to pay the tuition fees. I suspect I may be in the rare category where it is worth paying them however. If my girls earn £50k - £70k in their mid 20s and their brothers are likely to it is highly likely all 5 children will be paying this 9% tax. Given the fees are less than the school fees I already easily pay (due to my wise career choice etc... laughing as I type) and I can also fund their first flat/house deposits I think that is a case where it is worth my paying for the youngest when their time comes.

alpinemeadow Tue 07-May-13 19:21:28

Onelittletoddleretc I think there are powers for the Student loan people (can't remember the name) to bring proceedings to enforce the loan contract if a student goes overseas. I don't know how much these powers are actually used, or how much money is currently lost, or will be lost, as a result of students going abroad. But obviously that may be an issue.

funnyperson Tue 07-May-13 21:00:23

Xenia please stop using the royal 'we' when talking about money.

Xenia Tue 07-May-13 21:48:58
Xenia Tue 07-May-13 22:13:47

semua, I agree. I have listened to half of it and trhey do not really provoke any sympathy at all and things they seem to take for granted or did in their more better off past seem extravagent so you are almost pleased they are getting their come uppance and they are reaping what they sowed as one man gave up wellpaid work (so of course he has no money) and a few women stopped work to have children and then the husband's job went so again they took that risk. Their moaning about having to do cleaning as it's boring is fun to hear.

OneLittleToddleTerror Tue 07-May-13 22:28:05

alpine they can say all they like that they will bring proceedings against debtors overseas. But how do they know where you have gone? You are supposed to inform them. But we all know the UK govt cant even tell if failed asylum seekers are still in the country! Most of NZs outstanding loans are to debtors overseas. So far they have prosecuted 20 odd people living in Australia only. We started the loan scheme in 1992 fyi.

By the way, some calculations said 2/3 of debtors won't repay their loans over their lifetime. It is quite a shocking number really.

alpinemeadow Wed 08-May-13 06:37:21

Yes oltt, it would be interesting to know how much is outstanding from those who are working abroad - there was something in the newspapers a few momths ago, but i can't quickly find it - and how many cases the student loan company has successfully enforced. With higher fees, it will be even more important for the slc to pursue people who are overseas, but as you say there are practical difficulties!
2/3 of the total not repaid is a lot! But then the way people describe the system is as if the prospect of non repayment is one of its selling points (which in a way it may be) - 'borrow the money because you may never have to repay it!' An unusual message (repeating myself here!). and one whose effects on motivation/incentives etc are unpredictable!

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