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Should to pay your child's course fees?

(208 Posts)
MollyHuaCha Sun 01-Oct-17 23:45:01

Just that really. Students now start repaying their loan once they earn more than £25k per year.

If you can afford to fund your child's course fees and living expenses in order for them to avoid taking out a student loan, should you do it?

Any thoughts...???

Ragusa Sun 01-Oct-17 23:46:17

Not unless your child is definitelynicely going to be a very high earner, no.

Ragusa Sun 01-Oct-17 23:46:45

Definitely... no nicely!

BackforGood Sun 01-Oct-17 23:55:39

If you have £30,000 - £50 000 spare, you are far better letting them have it as a deposit / to enable them to take out a smaller mortgage, than to let them start adult life without a student loan, but with a mortgage that is £50 000 larger than it needed to have been.

So I'd say no.

Of course, if you are a really really high earner, or have 'family wealth' that means you can buy them a whole home of their own and pay their fees, then do so - just most folk aren't in that position grin

stonecircle Mon 02-Oct-17 08:43:55

There are quite a few posters on here who think you should pay fees. I'm sure they'll post soon!

Dippingmytoesin Mon 02-Oct-17 08:45:15

My parents offered to pay my tuition fees I asked could I have the money towards a deposit instead.

I think the money is better going towards a house as it's going to take forever to save up still once I've qualified.

Moominmammacat Mon 02-Oct-17 09:38:49

I paid fees for all three of mine in first year ... great mistake. They'll be paying back the same amount anyway and I could still have £27,000 in my pocket. It's only a consideration if you absolutely know they will be high earners. And it's all in such a state of flux, who knows what will happen ... vile business.

dreamingofsun Mon 02-Oct-17 10:48:09

one of the few benefits of this 'tax' is that I have found its encouraged my youngest 2 to take their studies very seriously. They know this is going to cost them a packet so its helped to focus their minds on their education.....though they still manage to fit in quite a lot of drinking and partying

MollyHuaCha Mon 02-Oct-17 13:35:18

Interesting views, thanks.

The uncertainty of how much you will repay is disconcerting. Also the fact the loan attracts interest from day one of your course. So young people begin the career earning very little but knowing they have a debt of £50-£60k.

maryso Mon 02-Oct-17 14:13:02

There is no mention that the 'vile' fees are clocked up on academic salaries mainly, and other running costs, consumed by students who choose to go on courses.

Financially, compound interest loans are only worthwhile if you make a positive return, however you count that 'return'. The sooner you pay up, the cheaper the loan. Those loans do not go away no matter how they are packaged, and they will be pursued by people more skilled and determined than most in the 'not sure if I'll earn enough to pay it back' camp. The current year's 6% is long overdue and the last few years' zero price indices are part of the anomaly of the last 10 years of subsidy for borrowers to clean out their debt.

The question is not whether you pay but who pays. Some would say it was immensely entitled to think some constituency of slaves will support your discretionary spending. Overseas students pay £20-30k per year. Most have probably been paying for education from the start, and value every equivalent penny of it.

Frankly it beggars belief that anyone who can pay will not, and anyone who thinks they are likely to not be able to repay what they borrowed should even contemplate borrowing. There is nothing to stop you earning before going to university if your parents cannot be asked to educate you to the level you aspire and may well deserve as a human being. Expecting other human beings to pay for you is just immoral to most.

Moominmammacat Mon 02-Oct-17 15:02:59

Didn't say the fees were vile ... just the system!

Dippingmytoesin Mon 02-Oct-17 15:11:13

Maryso how many people do you think could earn enough to completely earn the funds required for uni before going? I'm curious

Allthebestnamesareused Mon 02-Oct-17 15:31:03

I thought not paying was the way to go. DS is however 2 years out of uni and having to pay £230 a month repayments. The fact remains that even at this rate per month he will probably not pay his entire loan back but he will have to keep paying this amount which to me is equivalent to a car loan or similar. Even though he pays this interest is being whacked on each year.

If you have the cash I'd fund them!

Fex Mon 02-Oct-17 15:35:35

maryso. University would be possible only for the wealthy under your rules. No youngster could possibly save up £52k for fees plus living expenses for three years.

MargoLovebutter Mon 02-Oct-17 15:39:13

Allthebest, surely your DS must be a very high earner to be repaying so much per month - or am I misunderstanding the calculations?

haba Mon 02-Oct-17 15:47:04

If you have the means to do so, why on earth wouldn't you? The interest on the loans is extortionate, even modest earners will pay back many times what they have "borrowed".
It would be cheaper for many parents to extend their mortgage, and have their child pay them back, rather than use SLC.

MargoLovebutter Mon 02-Oct-17 16:01:37

I'm not sure it is a good use of money though haba. The student loan repayment doesn't impact on the ability to get mortgage, so I think I'd rather help my DC (if I can) with a down payment for their first house than paying off their tuition fees.

ujerneyson Mon 02-Oct-17 16:07:55

We don't plan to even though we can afford to. We do plan to cover living costs in full to avoid taking maintenance loans but we've made the decision that the children will cover their own fees. I believe in university fees, I don't think that they should be free and I think that our children need to see them as an investment in their future and to take some responsibility for understanding that university is a privilege that they earn rather than being entitled to. I don't think that paying £200 a month in fee repayment is a lot of money for a degree which will open far more doors than would be opened without it.

ErrolTheDragon Mon 02-Oct-17 16:10:21

DH and DD did spreadsheets with all sorts of scenarios and came to the conclusion that it was best for her to take the loan. The case in which this would not be the best option was if she became a very high earner but in that case she'd be able to afford repayments. She understands that someone has to pay for higher ed, that its regressive to expect people who aren't going to uni to be paying part of the whack - it really is a graduate tax, and taking it as such her tax rate will still be lower than ours was when we finished our 'free' uni back in the day.

haba Mon 02-Oct-17 16:13:02

Ujerney- if they degree has opened doors for them, then they'll already be paying more tax than most their age!
Margo- I don't see why my DC should go into debt for something that DH and I got for free. (At point of access).

Ta1kinPeece Mon 02-Oct-17 16:22:01

They are not a Loan
they are a graduate tax

I am also in the "use that money for a house deposit" camp

MargoLovebutter Mon 02-Oct-17 16:29:49

haba, my parents didn't see the point of me going to university at all, as they hadn't gone because it wasn't free in their day & you learnt your profession through apprenticeships in the most part (they were both professionally qualified)!

Circumstances change and I want to ensure that I put my money in the most useful place I can. Given I am unlikely to be able to afford to pay off student loans and help out with house deposits, I know which one I think is probably of better use.

Out2pasture Mon 02-Oct-17 16:33:37

A debt is a debt there is no good debt.
If you can afford it pay it.

donajimena Mon 02-Oct-17 16:36:50

I've just started uni and if I have to repay it I'll be in a damn sight better position than I would have been before a degree. The average salary for the profession I hope to enter is 28k. I can only get NMW jobs at the moment. So even with loan repayments its a win.
There is some good stuff on the MoneySavingExpert site about student loans.

Fex Mon 02-Oct-17 16:37:53

We could pay up front or help with a house but not both.
If I knew DC would be very high earner I would let them take the loan as they could afford the repayments.
If I didn't know what they were likely to earn (and who does?) I would let them take the loan as they will never repay.
At the point they actually get a job you can always change your plans and pay it off but you can't do it the other way round.
Whatever their subject and degree they may still not be high earners, health and career choices are unpredictable.
So my DC have all taken the loans.

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