Spent some of his hall fees already(93 Posts)
I put £2,000 in my son's bank account to pay his hall fees for his first term at uni later this month. Warned him not to touch a penny of it ... he's already spent £600 of it on nothing in particular, meals out, travel, coffee ... what would you do?
Pay his fees direct next time?
Take the rest off him before he spends the lot and pay them direct.
Dsis had her DS totally splurge 3k by Christmas when he was in his first term.
I would pay his fees directly myself and he would be working his arse off redecorating my house, cleaning my car doing gardening etc if he did not have any way to pay the money back.
Warn him to start looking for part-time work.
Get the rest of the money back and pay the fees directly yourself and make him pay you back the £600 in whatever way he can.
That is shocking.
Did you know he was crap with money?
Explain a bit further, is he going to be asked for £2000 straight away, or is it monthly?
DD gets a tuition loan and a maintenance loan, will he be getting a ML in a couple of weeks?
I'd let him stew until he realised he was going to have to beg.
I'd also set up internet banking transfer, between your account and his. Then you can drip as little as possible into his account.
And I'd be very pissed off at his immaturity and stupidity. What sort of Christmases and birthdays do you have? I'd be recouping from those.
He's being an idiot.
1) If it is uni halls, leave him to it. He will need to find the money to pay and the bill is in his name. Part of going to uni, is taking responsibility.
2) If private halls and you are a guarantor, then pay direct next time.
This takes me back to that thread about students being adults and parents should butt out. When you're shelling out this much cash it's not an easy thing to do.
Agree with creamteas
Wow - My DD has worked pt for nearly 2 years and budgeted her own money, including running a car, but I don't think I would trust her enough to put £2000 in her bank....most of them just don't appreciate the value of money and at that age, it just burns a hole in their pocket.
DD has a relatively low ML and so we will top it up, but will do it on a regular, weekly basis. If she
pisses it up the wall spends it all in the first 2 days, she will starve for the next 5. She'll soon learn!
We are paying for DD3's halls direct the same as we did for her sisters.? She will be paying for everything else herself out of her loan. She is in her room at the moment trying to work out how much sje'll have to spend week,
We are paying his hall fees, including food. He is not taking out a loan. We asked him to earn £1000 a term during his gap year to help him in his first year. He has had plenty of time to do this through tutoring, babysitting etc. he may have earned some of the money but he certainly hasn't saved any of it.
Then get him to apply for a loan next year.
All 3 of our DDs have taken out a loan. We wouldn't have been able to pay for rent and food.
He can still apply for the loan this year.
So in your shoes, I would just leave him to it. He can either borrow the money or get a job to pay for his hall fees.
He should be taking out loan, paying his rent and budgeting it.
You paying his rent now will do him no favours, and he clearly has no respect for your money if he pisses 600 quid away that easy. A couple of hundred, few nights out and some meals- a bit more understandable, freshers can get carried away- but 600 quid is A LOT.
Make him take out the loan, and loans for the rest of his years- and if you so wish to help him, give him the saved cash after he has graduated as a congrats for a 2:1/1st present 'here's a head start in paying off those loans'
Oh dear! . I would be furious. Does he have anything he can sell?
I would be worried about freshers week.
Woundupwanda a loan doesn''t cover rent,food and all other living costs.That's why we pay for halls, I do agree that the student should budget for everything else including food. DD2 who wasn"t very good with money before she went to uni surprised us and budgeted very well.
I don't want him paying the horrific interest on the loan when he should be able to manage without one if he is sensible. But at the moment, he isn't so maybe he will just have to stew ...
Bless. You don't want him to have to pay back a loan.
Then he will continue to spend your money like water, and be confident that you will bail him out, because you can afford it, and you won't ask him to pay anything back.
DD has both loans, her maintenance loan covers her rent almost exactly.
We give her a thousand a term for living expenses, quarter bills, food, transport, clothing etc. She has learned how to manage, and how to pinch in one area to splurge in another.
DS will be less competent when he goes, so he'll work on a monthly budget, or weekly.
1. Take the £1400 that's left back.
2. Tell him he is to repay you at £200 per term
3. Deduct the £200 from what you were going o give him each term.
Most students will be managing on less than £1000 per term, and will have to buy food with that. In your shoes I would be giving him a max of £800 per term, less the £200 to pay back, so £600 from you to last him until January.
Otherwise he's never going to learn the value of money.
My DS loan covers his rent exactly so unless he works he will starve, bit like me and his Dad good god why are you not letting your son grow up and be a responsible adult, mind you if you had put 2 grand in my account this early I may have spent 600 quid, did you not think where his money was coming from for meals etc..
I don't want him paying the horrific interest on the loan But he will still be paying the 'horrific' interest on his tuition fee loan won't he? He'll pay the same level back once he's earning, whether it is on just his tuition loan or both. I worried about my DD having 'too much debt' but once I realised they will take the same amount off her regardless of how much she owes, I stopped worrying. Chances are, half of them may never pay it all off anyway.
£2000 is a hell of a lot for hall fees for one term! That's £6k per year - way more than I've paid for my two so far in their catered halls. And more than I'm paying for youngest next year too.
Could it be he knows exactly how much he needs and has spent the rest because he could?
If he's this bad with money, I'd pay the hall fees directly and then give him a monthly allowance for the rest ( if that's what you are planning to do). Form my experience though, overall, £6k per year is not enough to live on ( assuming hall = approx £4k). But if he should have earned money to supplement that and hasn't, he's already in trouble. That's what student loans are for, maybe?
Right, thank you for all your sensible comments. I'm as outraged as you all are. I have taken all the money off him, will pay hall fees directly (they are £5,500 a year, catered en suite). He's out busking now and has to pay back the £600 by the end of the month and will then get £50 a week, by bank transfer, paid weekly. If he wants any more, he can earn it.
All good moves, moomin
And look at it this way, it's a 'well done' that you caught it now, while you can still stop him getting into debt, and help him work out a way to understand and what's involved in budgeting and help him out with they entails until he's gained the experience to do it himself.
They sound good moves. DD3 is going to try and live on £50 a week after Freshers week and she has to pay for food.
Well done that Moomin! It's one thing scaffolding their learning and developing maturity, it's entirely another to be a cash cow being ridden by a layabout.
So hopefully that will be the metaphorical equivalent of a cold bucket of water over him, and he can rethink things.
His learning curve just got a bit steeper.
amumthatcares true that "half of them may never pay it back all off anyway" but they will still be paying 9% of whatever pittance they manage to earn for the next 30 years. That argument only works for me if they earn little enough to never pay anything and it will be a fine life on £21,000 a year.
Moomin I wouldn't completely dismiss student loans as an option. Bear in mind that if he is entitled to any grant at all, this may mean he will also get a bursary from the university, and help with any field trips his course has.
Also, if he is rubbish with money, a student overdraft may seem really tempting to him. He can get one fairly easily with a student bank account. A lot of students view this as "free money", and don't look at the terms of when it has to be payed back. Getting in debt with a bank is much worse than getting in SFE debt.
Also, bear in mind that as you only pay back 9% of what you earn over the threshold, loan repayments are now lower than they were in the past, although obviously you are in debt for longer. I think it is very kind of you to try and stop your son getting in debt, but it might encourage him to be a bit more sensible, if he felt it was "his" money, rather than yours.
£50 a week will be plenty for him to live off, if he is outside London.
What is he spending 50 quid a week on if you are paying for food and a room
There are people trying to feed small families on that much...
There are people spending three times that on a haircut too.
He's going to have transport, course materials, entertainment, clothing...all sorts of bits. DD is managing on £50 a week after rent and course fees.
It's a reasonable amount.
£50 a week sounds massive to me when he doesn't have to buy food or pay any bills. DD1 and DD2 managed comfortably on far less.
Yes, quite agree ... books, I suppose, travel, food at weekends. £25 might do it if we are lucky.
Moomin I would let him take out a loan. I know you don't like the repayments and neither do I. But we found that it helped our DDs learn to budget and although we paid their rent they knew we couldn't afford to give them anymore money.
Let him take out a loan and learn to budget.
TBH 50 quid a week to pay for food, travel, clothes and books doesn't sound like much. Depends what he's studying, I was doing English and spent a fortune on books
He doesn't have to pay for food chubfuddler he's in catered halls.
Thing is he's been a bit of a prat and first weeks at university that's not unusual. But the other expenses he's going to have aren't going to go away just because he's got no money to pay for them. He needs to get the loan and have some help budgeting.
Books are a one off cost though, not an ongoing expense. They will cost more than £50. If you are prepared to fund the cost of the books he needs, then buy them yourself (most are available on amazon) and have them posted to him. Otherwise, he can make do with the library.
Obviously he will need some form of note-taking equiptment, but pen and paper is fine and this is obviously not very expensive and not a weekly expense.
Travel- is this refering to him coming home from university? If so, is it reasonable to expect him to use something like megabus- which is much cheaper than trains- to compare, I recently travelled from home to London and back for £15, compared to £70 on the trains. Or is he having to travel whilst at uni? This can get expensive, so it would be worth working out exactly what this will cost him a week.
He will need toiletries, and some cleaning stuff, as well as a small amount of food for weekends. He will also need to pay his phone contract if he has one.
Managing this on £50 a week is very very doable. I know people with lower weekly budgets who are also buying all their own food and some bills in shared houses. This will also give him some money towards socialising, which, whilst not esential, is obviously nice to have.
I would not be giving him any more money as he clearly needs to budget. He can take out a non-assessed loan without your consent if he is really that desperate for extra cash. I have a feeling he may be blowing it all because it is "free money".
The great thing about the loan is that they coincide with the payment days for hall fees!!! No chance to spend it. Why on earth not take out the loan and make life easier all round? this could and should have been avoided. Pay off the loan bit by bit in the future rather than cough up thousands now. Interestingly some posters are way out of date with hall fees. DD2 paying £8600 pa in London and no food included. Bills are though except tv licence.
Thank you for all your helpful responses. Thought you might like to know that by mega-busking DS has clawed back £400 in the past week and has got himself booked for a couple of wedding receptions before he goes off to uni so he should do it ... wouldn't have pulled his finger out had it not come to a head though so lesson learnt.
Regarding student loans, I am still totally anti ... and realise I am lucky enough to be able to be so ... assuming DS keeps busking.
Just Google Merryn Somerset Webb, an ex FT financial journalist, for a more eloquent explanation than I can give ...
"Here we have a charge on graduates taken via the income tax system; that there is no way out of; and that goes up with your income. There are elements of a loan in here but for most people, these kinds of repayments are going to feel more like a tax. And for those who end up paying it for the full 30 years, a pretty high one at that.
From 2015, if you are a graduate and you earn £21,000 you will end up paying a marginal income tax rate of 41%. If you earn over £42,475, you’ll be paying 51%"
If DS takes out the minimum loan + fees, he borrows £51,000 and repays £154,030 over 30 years. Not doing it.
Moomin - you say he's not taking out a loan? Are you sure?
My parents didn't want my DSis to be saddled with debt so
paid gave her enough cash for all her expenses. She still took the loans though and spent that too.
Bloody hell moomin how much are you expecting him to earn if you think he'll end up paying back £150k!!!!!
By my very rough figures is he averages £40k salary over 30 years from graduation he'll pay back 9% of £19k, which is about £2k per year, so £60k in total not £150k.
Presumably you've paid his fees too?
I felt the same way initially Moomin and even considered getting a second job to fund DD's living expenses so that she only had to take out the actual course fee loan. Studying for another 3 years for the privilege of a £50,000 debt does not fill me with joy, but having Googled, Googled and Googled some more, the overall opinion was that if they are borrowing the course fee loan, they may as well borrow the maintenance loan too. The amount they borrow doesn't affect the actual weekly/monthly payment they make back when they start to earn over £21,000. Obviously it would be lovely to keep the debt down to a minimum but it would mean a great deal of sacrificing (unless you are in the wonderful position of having plenty of disposable income). Even Martin Lewis on MSE suggested that unless you were wealthy and didn't mind parting with that amount of money, it didn't make sense to make the financial sacrifices of scrimping, scraping and second jobs.
Titchy ... the calculation was done at http://www.studentfinance.direct.gov.uk/scheme/dgv/pws/repayment-calculator.html using an average starting salary of £25,000
I can afford to pay his fees + accommodation, all I ask is that he earns his living costs, not that I can't pay them but that I think he should be doing it when, as he has proved in the past week, he jolly well can if he bothers to get out of bed.
I don't have any DC remotely near uni age, but we did think about starting saving now to pay the fees. Thenn I read about what is happening with postgraduate grants and loans, and how bloody difficult it now is to get to study for any advanced degrees without self-funding, yet they are becoming more important to have to get jobs.
So, when (I hope) DS gets there, he's on his own for undergrad, but hopefully we'll be able to help a bit if he wants to do more studying. Not that I'm telling him this until he's about 21!
I was extremely fortunate to
be old enough have had an undergrad grant with minimal parental contributions, a full grant for Masters and a full grant plus sponsorship for PhD, and I feel so sorry for today's students. They're pretty much stuffed. I would not be where I am today (using my degrees all the time) if I'd not had the grants.
*then (fingers obviously not working today)
Some virtuous parents, friends of DSs, have saved all their child benefit from birth ... and handed it over at 18. I was never so rich as when I did my fully funded PhD and a bit of secretarial work on the side.
Presumably he wouldn't get the full maintenance loan though so wouldn't pay back that much. Even so, using that calculator assumes his salary in year 25 is about £120k a year - easily enough to afford £1k a month!
VERY impressed at his busking though
There are threads nearly every day at the moment whee people are giving their student children enormous handouts and not expecting them to work or take out loans. Clearly all of these parents love their children and are being very generous but there will be a whole bunch of adults in 3 years time finishing uni with no idea how to budget and manage rent, bills, food money etc in the real world. It's one thing to contribute, another to pay everything.
I finished uni 2 years ago. My parents very kindly paid £200 a month towards my rent (approximately half of my share of the rent) which I felt terrible having to accept, I also had a loan and worked one night a week around a very full on course which included full time shift work placements. Money was always tight but I managed fine. Now I'm married with a dc due soon and money is very tight due to losing a job and general living costs but, having learnt to budget, we're getting by.
the loan interest isnt that bad and I have worked out DS is better off taking loans and us using the money we saved as
a house deposit
Titchy, that was putting in the minimum loan which is all he'd get. I'd love to be proved wrong on this ...
That calculator gave me that he'd pay £120k back - a a huge amount I agree. But the point was that the calculator assumes someone on an average graduate salary (or at least what they think is an average graduate salary - starting salaries for 21 year old graduates are actually much lower then £25k a year) will 20 years later be on a salary of £120,000 a year, which is somewhat optimistic I think....
Well, it's inflation I suppose ... if inflation is supposed to make the amount repayable more bearable, it follows that the salary must go up with inflation. But it's all so unknown ...
I am just about decided that I don't mind giving him the money but what I do mind is the idea that he doesn't earn anything. He's proved he can in the past week but I think only by keeping him short of spending money will he continue to earn.
And another thing ... (really should be working, not procrastinating here ...) as a graduate , earning £21,000 you pay tax at 41%. So on £11,000 of your income you'll be paying around £4510 tax ... which doesn't give you much to have fun with.
Pay fees directly! That's what we are going to do with notoriously spendthrift DSS1. Everything we can pay directly we shall and he will get a small amount of money in his account every Monday for food.
How do you work out that a graduate on £21k pays 41% tax ?
They pay 20% tax on roughly £11k of it and 11% NI on roughly the same which is 31% deductions. No loan to repay. And with a higher salary someone would still have to pay NI and income tax, so it's a bit disingenuous to say graduate tax is 40%. It isn't, and the loan repayment part, even with a very high salary, say £100k, is only about 7% of total salary.
I don't get the argument tht if you give your kid money then they are not going to be able to manage their money and are going to end up 'spoilt'. It depends on the people involved.
We give our DCs enough money to live without getting a job whilst they are at Uni. Our kids are all extremely grateful and are very careful with the money. During the summer they either get paid work or unpaid work that relates to their degrees. They are not in the least bit 'spoilt' and I think they are even more careful with the money as we have given it to them.
They don't drink, walk everywhere, shop in Primark, buy their train tickets months in advance to benefit from supper cheap tickets and live in typical grotty student houses.
However, the fact they dont have to worry about money means they can focus on their studies and really make the most of their lives. I think it's fantastic that they are so happy.
Obviously, if they were 'wasters' we wouldn't be funding them in such a generous manner.
I kind of get what you're saying Yeah, but this is what my parents would have said of my sister. She lived very frugally, didn't socialise much, (really you have 2 students away at Uni who never drink? ) If you do have two children who are more careful with your money than they would be with their own, then well done, but I can't imagine it's common.
In actual fact my sister was managing/living really well because she was spending the money my DPs gave her to avoid her taking loans, plus the loans she's taken without them knowing and a bank student overdraft.
Thank you YeahWhat ... that's how I hope mine will work out.
As for 41% tax ... as Merryn Somerset Webb said in earlier post.
Nothing on first c. £10,000, then basic rate 20% + 11% NI + 9% loan repayment ... well, that makes 40% so I don't know ...
The worst case scenario is if you don't earn very much and are paying 9% forever and getting nowhere. Look at this ... again from MSW ...
"If you are earning under £21,000 you are only charged RPI. If you earn between £21,000 and £41,000 you are charged on a sliding scale of an extra 0.15% for every £1,000 more you earn up to RPI plus 3%. Over £41,000 everyone’s on RPI plus 3%.
So the more you earn, the higher the rate of interest. The Telegraph points to two examples. A and B both have a debt of £40,000. A earns £42,000, so he has to pay £1,890 towards his debt in year one. But thanks to the interest rate he is stuck with, his debt actually grows by over £2,600. B earns £22,000. He has to pay only £90 towards his debt and, because he is charged a lower rate of interest, his debt only grows by £1,438.
We can look at this another way too. Add up A’s income tax payments, his NI and his repayments and you find he has paid a total of 30% of his income in state mandated reductions. B will have paid 19%. Before taking account of the repayments, those numbers are 25% and 19%. If you view the rises in the debt as effective reductions the difference is even wider."
And then add the 11% NI and you'll be living on beans for life.
I don't think paying 9% of your salary over £21k a year is exactly living off beans! Put it another way, 91% of your salary over £21k is taxed and NI'd exactly the same as any other employee without a loan.
Yes the interest may well wipe out what you pay back, but ignore the total amounts owed, the repayment is the same irrespective of whether you owe £10k, or £150k. Frankly so what if you don't get anywhere paying it off. It gets wiped out after 30 years anyway.
It really should be regarded as another tax, not a loan where interest rates are taken into consideration.
I'm all in favour of the old system, believe me, but bandying about quotes about graduates living off beans paying back £150k worth of loans and 41% tax forever is just scare-mongering.
Factually correct, not scare-mongering ...
If he earns £20k he will be paying 40% on half of that so his effective tax rate is 20%
I believe it's called the marginal rate ... whatever that means ...
Marginal smarginal..... By that token no-one should be looking to get a job that pays more than £42,000 cos the rate of tax is 51%.... Except most people realise that 40% tax on earnings over £42k plus 11% NI DOESN'T mean they lose over half their salary to the exchequer. Spouting number like students will pay 42% tax IS misleading. And puts off applicants from lower socio-economic backgrounds more than other groups because they don't understand the system.
did he tell you suddenly or did you guess ? I would be livid!!
I asked to see his bank account. I was very livid ... but now that he has proved how much he can earn quickly I'm quite cheered up.
OP by your reckoning you won't want your son to take out a mortgage either, as he'll have to pay all that interest on it
Moi in, god to see that your son has been able to earn a lot of money very quickly.
Perhaps it's something to consider when you are deciding a monthly allowance for him.
Also, if you can pay his costs so he leaves uni with no debt, then good for you. I agree that saddling graduates with a massive debt, or 9% extra in income tax, is worth avoiding if you are able.
Moi in god?? Please read as
Moomin,, good......... Etc
GreatNorthRoad. .. Lol, yes I know its odd that my DCs don't drink. It's not for any reaon other than they don't like it. One still goes clubbing but only drinks soft drinks. My DH and I both drink a normal amount so its not as though its come from us.
I will be interested to see if my younger two drink when they get to Uni.
I guess the point I was trying to make in my earlier post is that just because a child comes from a more wealthy background doesn't mean they will end up spoilt and lazy. It doesn't work like that. We are easily able to help our DCs and we are happy to do so. My DH and I have earned all our own money and have worked hard over the years and we are happy to spend our money on our kids as they leave home. They are all nice kids and its a pleasure to see them grow up. I just resent the fact that some people seem to think by helping them we are going to 'ruin' them.
Quite agree with yeah what. They may as well enjoy it when they need it rather than when we are dead and half of it has gone in inheritance tax. And I'm not giving him any extra, we have decided. He got £90 busking this morning so he can keep doing that til it's too cold.
And not overly keen on mortgages either but may be no choice there.
I just resent the fact that some people seem to think by helping them we are going to 'ruin' them - but in this case the OP has already stated that her son had spent £600 of what he had been given for accommodation at university before he even got there .
Still, if he can earn so much by basking I am wondering why he is bothering with university .
Because you can only busk when it's warm enough. And he is reading music!
Lol, nice work OPs son!
If the weather stays good then hopefully he will be able to replace the money by the time Uni starts
and, hopefully, he will have learnt his lesson and not blow it again during freshers
A cheerful note on which to start the term. Wastrel son who at the beginning of this thread, on Sept 5, was £600 in debt is heading off to uni having cleared the bill and saved £425 as well. All done through combination of busking, babysitting, playing at weddings and not spending anything. Has taken vow of poverty until he graduates. Would not have happened had we not had initial catastrophe.
Sounds like he needs to register with HMRC under self assessment.
Well done to your boy, OP.
All youngsters get caught up shit creek on occasion, but instead of wailing for a rescue, he carved himself a new paddle and got himself out. So that is a very satisfactory ending to a mess.
No Kez100, will be mega-careful not to go over personal limit. I suspect this is a brief patch of activity before he lapses into lethargy or better, actually does some work at uni.
That's brill. You should be proud of him.
It's what growing up is all about. I know he was a pillock but he learnt from it and DID something about it.
Self employed need to register when they have an income not when they go over personal allowance.
Oh gosh, I thought it was just when you were coming into tax territory ... what a bother!
difficult situation. Are you sure he's just splurged the lot, though? Mine has a fairly substantial number of things they have to pay for in the first week (gown, lab coats and a few others I can't remember) and needs about 100 just for that.
oops - thread had moved on and I'd missed the second page somehow. Glad he's sorted himself out.
It happens a lot at the beginning. Costs depend on where he studies. life is extremely expensive and costs are running without warning. Meals can cost a lot and a lot and must be sufficient in quantity. Some portions come half of what they used to be so some people need to double the order. I would discuss with him the costs and see what is more cost than you expected and how he can budget.
We had a sandwich each of us at a caffee in central London last week plus just one coffees and this cost over 10 quid, and that was in a cheap-cheap place! I had a shock.
I paid the hall direct which avoids the issue, although some will say that does not teach the teenager to manage money of course.
I agree that learning to manage the money is important skill but some essential costs cannot be foreseen and can run very high suddenly. For instance a dental treatment or a computer adaptor which after 3 years insurance is not covered.
What's all this tax nonsense? It's a loan repayment! And it's cheaper than a bank loan, especially at that age.
I almost thought I was reading the DM then!
From someone who has a student loan (my parents couldn't afford to help me out apart from the odd £50 every couple of months) - it really hasn't made that much difference to my wages, I earn more because I went to uni, and I still take home more than most (though not all) of my friends who didn't.
Also the loan repayment route is easier than the old route were lots of forms had to be filled in and the payments were fixed for a year - if you lost your job half way through the year it was a right kerfuffle!
I hope your DS realises the importance of learning to budget whilst at uni as you never know what's round the corner.
On a more positive note, I think most students spend a little too much the first couple of weeks as you try to be as social and as comfortable as possible (to alleviate the homesickness) - and both of these things cost a bit!
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