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University budget: How much to save for each?(7 Posts)
We live in London, so I am going to assume that each of our children will leave London for University. I also assume they do 3 year courses.
How much money is spent to put a student through University in total (fees, living expenditure, rent, etc)?
I want to have some idea so that we can start saving up from now.
Any thoughts appreciated . . . .
That will depend on to what extent you want to support your DCs. They can get a student loan for fees and a basic standard of living. However many parents do not want to see their DCs saddled with debt. We have taken a middle road and pay our DDs rent but she lives on her loan and what she earns from a part time job ( last year she managed just on the student loan). Depending on your income your DC may get a maintenance loan and possibly a bursary from their uni. DD has two flatmates in that situation.
You also cannot predict what fee levels (currently a max of £9000 per annum ) will be in the future since the government is far from clear on it's future strategy, The impact of the latest fee rises are not yet fully apparent, especially combined with a year last year in which some top unis were short of their numbers due to fewer applications because of the fees hike, but also the way grades were deflated and the fact that universities were able to exceed their student quotas for courses where the candidate had AAB or better. There could be a situation where it moves to an entirely free market which is what many in government want, with the most popular universities charging more but others less or it may become apparent that the current combination of measures is undermining respected institutions and there is further
tinkering without understanding the implications development of government policy.
There is also a huge variation in the cost of halls, student rentals etc. depending on the standard of accommodation and the area. DD has lived in places with vermin and now in a very rough area (I don't know whether it is a good or a bad thing that her flatmates have been befriended by the neighbouring family who run the prostitutes who work the street at the end of the road, it would worry us deeply except that I had lots of friends at uni who lived in the red light area and got on very well with and were looked after by their prostitute neighbours ) To a certain extent that is also determined by the flatmates your DCs choose. DD shares with two people with a tight budget who live entirely on loans / maintenance grant / bursaries, two people who like her have their rent subsidised but live on their loans and one who is moving out into a flat he bought himself! It is not uncommon for parents to buy a flat for their DCs, not least because they are buying peace of mind about their accommodation.
So it is really about what you can afford / are prepared to pay. It is possible for them to live on student loans, especially if the get a maintenance grant. On the other hand you can keep them in the manner to which they wish to become accustomed
Pretty much what Copthallresident says. Our DS is getting the fee loan and a partial maintenance loan, like many others we are paying the hall fees, £4400 for this year, food not included. There was a recent Moneybox programme on R4 about student finance, you might still find it on iplayer. Anyway, the experts were saying it would be a poor use of money to pay the fees up front because the vast majority of students will never pay it all back anyway, and the debt is written off after 30 years. The view was that it would be better to subsidise their living costs or use the money to save for a deposit on a house for them when they are older.Hope this helps, its a bit of a minefield!
Totally agree with Copthall's except it is important to stress that if your DC are entitled to the minimum maintenance loan it does not cover a basic standard of living. In most areas it will not even cover their self catering Hall fees. Hall fees at my DC's university are £ 1000 more than the minimum loan. Hence some parents who are able pay their DC's rent. It is not possible to live on a minimum student maintenance loan unless you have a job or funding from parents which is what the government expects you to do if you earn over a certain amount.
My DCs have £50 a week to spend from a variety of sources which they can live on. This doesn't include their mobile phones. One has a job, but saves the pay.
OP if you add together the total possible loan and grant and university bursaries that are available you would get an approximate total the government thinks it costs a student per year. Do note though that for every pound of non repayable grant a student is allowed there is a reduction in the loan available. I think the total before bursaries is £ 7125.
we reckon about £10K per year for living expenses and then fees on top of that.
Bearing in mind that these things can change, have a look at the student finance calculator, to work out how much they would get based on your household income (bearing in mind that people get both promotions and redundancy - or if you're an older parent, a pension!) www.studentfinance.direct.gov.uk/portal/page?_pageid=153,4680136&_dad=portal&_schema=PORTAL
If you are on a low income (below around £25k pa household income), then your DC will also receive a bursary from the university. These bursaries can vary wildly in terms of how much they give (from the low hundreds to ~£3k pa) so speculating at this point is a bit pointless - although I should probably note that the more prestigious (i.e. Russell, and to some extent 1994 Group) universities tend to offer more.
Have a look at this as to why it's unwise to pay fees upfront www.moneysavingexpert.com/students/student-loans-tuition-fees-changes
If you want a suitable ballpark figure (+ inflation) then I'd suggest looking at the difference between what your family income would render them eligible for, and make up the difference between that and the full loan + grant + bursary. The full loan + grant + bursary makes for a perfectly comfortable standard of living, especially if the student works during the holidays (which they should IMHO).
lyra41 - that's the number I was looking for. Thanks!
So I guess the answer is £10,000 living costs and £9,000 fees x 3 years.
Not much change from £60,000 for a 3 year university degree.
I appreciate that things will change (fees, living costs, loans, grants etc) but knowing how much it costs is the first question. Where the money comes from is an equally important, but different question. Thanks to all those that helped answering my next question!
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