I am a single parent and have quite religiously saved every spare penny for my DD to go to university. I earn a reasonable salary and my DDs and I live quite frugally (we live in 2 bed place and I sleep in the living room, if we go on holidays they are always cheap and cheerful).
I have managed to save a considerable sum and will be able to meet the bulk of my son's accommodation and living costs whilst away at uni.
However, I began looking into Martin Lewis' advice about not paying for anything up front. I have come to the conclusion that actually allowing my DD to take the highest maintenance loan he can get and actually getting into debt may be the best option. Then, he could use the money I have saved for a deposit on a flat.
My thinking is this:
My DD will probably borrow 56k
Currently, students repay their student loan once they earn 21k. They must pay 9% of all earnings above 21k. The loan is wiped out after 30 yrs.
If my DD's average salary after working 30 years is 40k per year, then he will repay, on average, 1710 per year.
1710 x 30 years = 51300. He will in effect pay back less than he originally loaned and will not pay off the interest.
Has anyone else looked into this? With these figures, am I wrong to encourage my DD to take on board student debt? Thoughts please.
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Should I support our child through uni or make him take maintenance loan?
64 replies
elfreda69 · 22/12/2015 14:18
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