Planning ahead for university costs - questions(24 Posts)
My DD is 14 so a few years off yet, and of course she might not even go to uni but as things stand it looks likely.
I have just had an inheritance, and I plan to use the money to pay off my mortgage and save the rest towards my
currently non-existent pension.
I would also like to put aside an amount for DD to see her through university (assuming a 3 yr course outside London) to save me having to pay out on a monthly / termly basis when the time comes. I can get 4% if I put the money in a Children's ISA now so it makes sense to put the whole amount in there now, rather than wait and see.
So how much would you say in total you have paid out for DC at uni? I am a LP and I anticipate at the time I'll be earning approx £25-30k. I'm not trying to cover everything - she can get loans for fees and some maintenance but I have no idea what parents are paying on top these days?
It's a bit of a how long is a piece of string question really
Lots of factors -some areas are easier for students to work in than others
Vocational courses may not allow students to work
Hall or private accommodation
Living on campus or not
I'm a mature student and the straight from school students on my course get between £0-£500 a month from their parents (plus the emergency phone calls home requesting food shopping and or travel costs to be covered)
I think it very much depends on how much the child can borrow plus what parents can afford. You can put your salary into the website & it will tell you the maximum loan your child can get.
First year costs seem to be the highest. My dd is in catered halls & that costs approx £6k per year. Other unis are more expensive. Her rent plus bills next year will be closer to £4K I think.
You would then need to see how much extra your dd needs each month on top of that.
I would say that if her loan covers her halls/rent you are looking at £50-£100 per week on top
OK great. Thanks for your help.
I've just done the online calculator and based on my expected salary she would get £7900 maintenance. I haven't included her dad / stepmum's income. Is that right?
So if I aimed to have approx £12k by the time she's 18 that should comfortably cover it? She already has about £7k in her ISA from regular saving. It would be nice for her to have a bit left over for flat deposit or travel and still not cost me anything when the time comes. That way I will have a lot more flexibility with my job at the time.
Sorry - I know it's a vague question.
If her anticipated maintenance loan is £7900, that is about the maximum. My DD gets way below that and she is at a university in London. There are some universities with expensive halls and others are cheaper. Some cities have higher students rents, eg Bristol, where just the rent would be £5000 pa easily for a share of a house. £100 per week is normal in some areas there. Therefore if she chooses a cheaper hall, the type of loan she will get will easily cover the rent. First year can be cheaper. It was for us!
I think you need to check whether her Dad's salary counts. Does he pay anything towards her costs? Would he in future? I honestly do not know the answer, but he could be a source of money. I am never sure spending an inheritance on university costs is the best use of the money. There is an option of working, if possible. Also, paying your mortgage off may reduce the amount of loan she gets as you have less expenses going out every month.
We've said that we will cover our kids' rent whilst they're at university, and they will use the maintenance loan to live on (figured that general living costs probably vary less than rents). At the moment that's about £3700 (although I know the system is changing, isn't it), and we have planned for up to £6K a year rent. (If either of the younger ones go to London we'll have to deal with that then!)
So far - one at university atm - this is working fine, dd1 has plenty to live on. She had nearly £1000 from a summer job, and has used some of that for big purchases (e.g. replacement phone), and is using most of the rest for her deposit for her rented house next year - I figured that seeing as she had it, it might give her more of an incentive to get it back than if I paid it!
As others have said there are lots of variables, and some big differences between different Unis. Cambridge and Oxford are probably amongst the cheapest, which may sound a little strange given all the myths pedalled about them. For DS1 a conservative estimate put Cambridge at around £1500 per year less in terms of costs than Durham (the insurance choice).
I would second the holiday working angle too. Clearly a financial benefit, but also builds the CV (to a greater or lesser extent dependent on what the job actually is) and increases the marketability for the post uni job market.
there are too many variables. 4 years is a very long time in education policy and reform terms. my best guestimate would be to assume £6K per year is needed. then if that is too much its no problem.
stand by for changes to loans etc as so many of them aren't being paid back.
We have budgeted for £6k per year but that is with dd only getting the minimum loan (£3700). She lives on that and we pay her rent. Her rent is coming in at considerably less than £6k per year but that is Cambridge. At other places she looked at we would definitely have needed at least £6k to cover rent. Maybe think about it in terms of needing £10k per year and take off what she will be able to get in loans to see what you need to be putting in.
bojorojo is the mortgage relevant for SFE? I've filled in more SFE applications than I care to remember so I may be in a state of denial but I think it's quite simple and that a parent only declares their income and the number of dependent children including those still in higher education, I don't think outgoings are declared.
Also, even if outgoings are declared and a mortgage is relevant, I can't really believe that seven further years of paying interest on a mortgage would be worth it for the extra amount of loan a DC might thereby borrow - I don't think the economics of that one stack up.
If you can budget about 5k a year to pay for accommodation your dd ought to be able to live on her student loan. This is what our dc are doing.
OK £5k a year sounds reasonable. If it's true that she gets over £7k as a maintenance loan then she'll have £12k a year which sounds like loads! I'm sure I had £3k a year as a student. It was 20 years ago though!
please don't depend on her getting £7K maintenance loan and remember it is a loan, not a grant like you had, so the more she has, the more she has to pay back.
you need to find out if any of her dads income is taken into account. I thought it was both parents even if estranged. you can do this by ringing them up and asking the question.
the accommodation that we have been looking at varies from around 3.5K up to 7K.
NRPs income is not taken in to account but if you are living with someone then their income is.
You are no doubt correct Molio. I was just flagging it up as something to have a look at. As we do not have a mortgage it passed me by but years ago mortgages did count on the old grant system from local authorities I believe.
In Scotland, both parents income is taken into account but not step parents . Otherwise everyone would just say they were separated and get a bigger loan .
I am trying to save £10k per child per year for university ,on the assumption that the savings won't keep pace with the inflation of university costs .Ive been saving their child benefit since they were born and when I get a bonus from work I put that in too .
Do you not have £0 university fees in Scotland? Why will your children need you to save £10,000 each per year? For how many years are you doing this? Are the accommodation costs ludicrously high in Scotland?
Bojo - £0 fees in Scotland aren't sustainable....
What titchy said . Who knows what the government policy will be in 10 years?
And there's no guarantee that my children will get into the course they want in Scotland - entry requirements are high as there's massive demand domestically and from overseas students.
I had to work my way through university and it was pretty tough. I worked all day and evening every Saturday and all the summer holidays . I also had to pay for my accomdation for most summers too .
I was really broke and couldn't do lots of normal student stuff because I couldn't afford it . I never once went to the pub with my classmates because I didn't have the money . When we went on fields trips and they all went down to the bar, I'd make excuses and go to bed early . I'm sure they all thought I was anti social .
I never went to an " end of term ball " or all these events I hear students along about now . I borrowed a skirt and blouse to graduate in ( we had to wear black and white ) .
I never ever had a take away - we just made meals from whatever we had at the back of the cupboard - usually canned soup and rice . Fine fare yellow label was a lifesaver . ( this is before the days of bloggers who tell you how to eat well on tuppence ) . Goodness knows how I didn't get scurvy as I hardly ate any fruit or veg for years.
I bought everything in charity shops, long before it was cool . It wasn't cool, it was nerdy , before that word was invented .
It affected my studies, especially at exam time when everyone else was revising and I still had to go to work . I couldn't afford to buy most of the books for my course , I just bought the main ones second hand ( usually older editions ) and queued in the library to borrow the others .
I copied out other people's notes and class handouts by hand because I didn't have the money to photocopy them .
I lived on the other side of the city from the university where accommodation was dirt cheap .
I went to the university sports building every day at 8am for a shower because we couldnt afford hot water or heating in my flat.
I lived on way less money that benefits ( it was called supplementary benefit then ) and it wasn't easy .
Yes I got a good education , I loved university and I came out with no debts ( no student loans then ) so I'm very greatful . I'm glad it did it and it's enabled me to earn more over my lifetime .
But I want better for my kids .
Looking at the website you need to send proof you are separated.
I think how much you give depends on how much you can afford to give. I give my son £500 a month and his dad sorts out accommodation. If I had less he could survive on less but I want him to enjoy uni and eat sensibly and be warm and get to go on kayak trips etc and I see no point not giving him money we can spare to enjoy himself.
I think it depends on what you can spare. We do the same for our DD although less per month as she has the loan. They are good value and for the vast majority of people taking out a loan is the usual way forward. We could have paid the fees, but we didn't. You never know, DD may never pay them back! Better than paying large sums up front. If paying the loan back becomes onerous, we can drip feed money to DD to help, but the money will have been invested for ages. It may also help with inheritance tax planning! Now that does scare me!
We paid for my DC"s accommodation which in Year1 halls tends to be higher.Then we pay for food, a monthly donation for a mobile phone (£25) so they can buy upwards if they want.We also pay for travel home.Socialising & clothes they have to earn from jobs or family birthday/Xmas gifts.I think they is actually a benefit to working at Uni.
I estimate 12k for accommodation over 3 years and then a few hundred each month when at Uni, which we fund from income.I've encouraged the dc's not to go for London Unis as quality of student life is impacted by finances.
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