Cost of University Sept 2012 onwards - Student Loan or Bank of Mum and Dad - What's going to happen in your house?

[Watertight]

Can I ask what everyone's thinking of doing? Will your kids Student Loan it all the way or are you planning to contribute? If so, what?

As a VERY rough guide, I have been told by friends that the costs could be:

Tuition Fees: £9000 (some unis will charge less but it's not completely clear yet)

The directgov website says that everyone, regardless of parental financial status, can borrow all of their tuition fees.

Then, there's:
Accommodation: £3000-£6000 pa (depends on how nice/where it is/ whether it has its own bathroom/ whether meals are included etc)

and:

"Maintenance" £3000-£4000 (ie books and stationery, travel, beer/ going out, clothes and toiletries etc etc etc. It MAY also include food if your hall does not include meals. - ie, £"How long is a piece of string") Some kids will be more successful than others at living on a pittance.

Everyone (regardless of parental financial status) is entitled to borrow a "Living Cost" loan of £5,500 (outside London) or £7675 (in London) but this (I think) would have to cover accommodation and everything else that I have listed as "Maintenance". The numbers don't add up...

Some students will be eligible to receive a grant (that does not have to be re-paid) if their household income is less than £42,000.

Also, some kids will get part-time jobs and summer jobs to supplement their income.

Apologies if I've got any of this wildly wrong. We're not there yet and I'm trying to get my head round it.

Any thoughts, people?

[Greenstocking]

Student loans.

They don't get paid back until earning 21K and then at a very small rate indeed.

Getting into debt yourself to pay them makes no financial sense whatsoever.

[Northernlurker]

Tuition fees - they will have to have a loan. Everything else - well that will depend on many variables. We will give them what we can but I will be expecting them to do summer jobs too. It's very depressing.
I'm just so glad there's three years between the older two and then 6 years between dd2 and dd3. No gaps years in our house - paying for two at once would break me!

[Watertight]

Greenstocking

I understand that you borrow £9k as a Tuition Fees Loan to pay your £9k tuition fees.

If you can only borrow £5500 as a Living Cost Loan and your accommodation cost £4000 and you then need, say, another £3500 for food/ clothes/ toiletries/ travel/ books and stationery/ beer and going out etc etc etc, there is a shortfall there of £2000. I suppose this could be plugged by the part-time job.

Northernlurker

It really is depressing. I can't quite believe it really. I can't believe that our kids have been shafted in this way.

[Greenstocking]

You do not pay a penny back until earning 21K and then only about £50 a month.

Before, you paid it back at 15K with a higher monthly rate .

Before that, your parents paid every penny, up front or you got a grant if you were genuinely poor or your parents were separated and could fiddle it.

I know which system I prefer.

[MmeBlueberry]

That's an easy question to answer - student loans all the way!

[eatyourveg]

Its the interest I object to, by the time you graduate you've already accrued a bigger sum than 3 x £9K. They say its not a debt but last I heard, if you paid upfront you would be penalised (not that we could afford to pay upfront) seems there is no way to avoid owing lots of money.

we'll probably end up sending tesco/sainsburys/morrisons food vouchers if ds1 stays in uk but am seriously looking at The Netherlands where tuition is only £1700 and tons of courses are taught in English!

UK or Holland he will have to get a P/t job to reduce his borrowing costs - I don't think it is right to supplement him unless he is prepared to do his bit to reduce the debt

[webwiz]

Those figures don't look right to me watertight - are they changing the amount that can be borrowed as a maintenance loan because its only about £3,600 that isn't dependent on parents income at the moment? For DD1 this covers her accomodation and we give her a monthly amount for food and living costs over 10 months of the year (about £200 per month). She works in the summer for her clubbing money. DD2 goes to university in the autumn and a similar budget looks about right if she gets her first choice accomodation.

My understanding of the new tution fee loans was that there would be a penalty for early repayment but not any charge if it was paid upfront. DS is in year 9 and hopefully it will all have settled down by the time he goes.

[MmeBlueberry]

My DS gets a loan of £4995 without us declaring income. He is in central London, though.

[4teenmum]

I have twin daughters who are just finishing their first year at Uni. We pay their hall fees and will pay their rent next year (approx £7.5k a year for two). They have taken student loans to pay their fees and maintenance. They get the £3.6k that isn't dependent on student income. We worked out we could afford this level of support for all four children but that was before we knew how much the fees would increase for the younger ones. It doesn't seem fair that they will have so much more debt than their sisters.

I think there will be much better data available on which degrees are 'worth' studying. The Student Loans Company are thinking about releasing their repayment information (anonymised) to researchers at Oxford so that they can see which degrees, at which universities, have had their fees repaid i.e. resulted in jobs that have allowed students to pay back their debts. See www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=416276

[anniewindsor]

I too think this new system is fairer. DS1 will be going to university in 2013 and we'll fund it through the student loans system and his working part-time. I'm not so sure it's them that are being "shafted" but our generation not paying our way - we got everything for free which, we can see now, doesn't work. DS2 wants to join the Royal Navy but then in the past year he has wanted to become a pilot, structural engineer and architect so who know.

[Watertight]

4teenmum

I hear of a lot of people doing the same as you.

The parents pay the hall fees for the first year's accommodation (plus, maybe, a food allowance if meals are not included) then the rent (and, again, maybe a food allowance) when they move out.

The kids will borrow the £9k for the tuition fees and about £4k as a maintenance loan for everything else.

And, of course, will have part-time and or/ holiday jobs.

Can I ask - were meals included in the twins' hall fees or did you give them a food allowance (or did they have to buy food out of the maintenance loan?).

What is a reasonable food budget for a single student to live on?

I agree that it seems horribly unfair that some of your kids will graduate with a far bigger debt than their siblings because of the massive change in the system coming in September 2012. This is what I mean when I say that I feel that this generation of kids have been shafted. Will lenders take into account outstanding student loan debt when they calculate whether or not to lend a mortgage? I don't think that any of us know for certain yet how all of this is going to pan out.

[inthesticks]

It's a couple of years off for me but I really resent it.
DH insists it is a graduate tax and I know he's right in theory but I hate the fact that my children will start life with that huge sum of debt on their shoulders.
They have been brought up to save and not to borrow.

[saggarmakersbottomknocker]

Student loans all the way here - just as it was for the others.

There's no way mine spend £3k+ on maintenance though.

Ds gets his maintenance loan which just about covers his accommodation - on top of that he has to manage on about £50 a week for food and all his extras, so yes he lives on a pittance. No choice.

Like eatourveg it's the interest that I have an issue with - that's what makes it different from a graduate tax. Tax doesn't increase during the years that you don't earn enough to pay.

[Milliways]

We pay DDs rent and she takes the fee & maintenance loans. She is at Cambridge so no term time jobs allowed, but they get longer holidays and she works then. If we didn't pay her rent she would have had £200 to live off for the term - not really doable - but they CAN get student overdrafts as well.

Just feel for DS as we hope to pay his rent, but his loans will be SO much more :(

[mumeeee]

I've only got one leht at home and if she ever decided to go to uni it would be studrnt loan like her sisters have had,
For both DD 1 and 2 we paid all the rent in halls in thier first year, IN the second and third year we paid most of the rent but they had to pay the rest and all biils, ell actually DD2 is still in her second year, She is staying in the house she shares over the summmer and she will be paying the full rent for JULy and August

[Watertight]

This approach (parents pay hall fees in first year, rent thereafter) and the child takes the tuition fee loan for tuition fees and the maintenance loan fir everything else (and a holiday job) seems to be the most common.

Accommodation costs vary enormously - rent in London is clearly going to be more expensive than, say, Hull.

The cost of hall fees varies so much even within one campus...

I think an average amount would currently be about £3500 at today's prices but can be as much as £5000.

But then, I guess, we won't be feeding them at home any more or paying for music lessons/ extra curriculars/ school trips and other costs.

It all feels quite scary, I guess.

[LynetteScavo]

Loan for fees.

I'm going to strongly encourage DS1 to study at a Uni nearby an commute, which will be possible as the best place in the country for what he is likely to want to study is only 10 miles away. So I will still be cooking and cleaning for him, bless. He will also need to get a part time job if he wants any sort of life.

[MmeBlueberry]

My DS is at uni in Central London and his hall fees are £78 per week.

Next year, he is in a flat share for £140 a week.

He spends £15 a week on food, and £15 a month on his phone. Everything else is discretionary.

[Dropdeadfred]

You DO NOT get the full maintenance loan Watertight - unfortunately if your parents jointly earn over approx £27,000pa then the amount gets gardually cut to the point where if you earn over £60,000 they only get 70% of the maintenance.
My dd's accomodation is more than her maintenance loan!

[Watertight]

Thanks Dropdeadfred.

I think the reason I'm getting a bit confused is that I'm hearing bits of what the current system is (up to September 2012) and bits of what the new, post-September 2012 system will be. My DD will be one of the first batch of people going through the new system.

I've just looked again at the relevant bit of the [http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/Applyingforthefirsttime/DG_171539 directgov website]] and it says:
Maximum Maintenance Loan rates
The maximum Maintenance Loan available for students starting their course in 2010/11 and 2011/12 is:
£3,838 if you?re living in your family home
£4,950 if you?re living away from home and studying outside London
£6,928 if you?re living away from home and studying in London
The maximum Maintenance Loan available for students starting their course in 2012/13 is:
£4,375 if you're living in your family home
£5,500 if you?re living away from home and studying outside London
£7,675 if you?re living away from home and studying in London
In 2011/12 you can apply for 72 per cent of these maximum Maintenance Loan amounts without your household income being taken into account. How much you receive of the remaining 28 per cent will depend on your household income.
In 2012/13 you will be able to apply for 65 per cent of the maximum Maintenance Loan without your household income being taken into account. How much you receive of the remaining 35 per cent will depend on your household income.

So!

DD borrows the £9k Tuition Fee Loan for the £9k tuition fees
DH and I pay the hall fees/ rent
DD borrows the Maintenance Loan (65% of £5500 for outside London=) £3575 for food/ travel/ books and stationery/ clothes and toiletries/ etc (This is £300 a month - not a lot to feed yourself AND do everything else)
DD works in her holidays and earns money to fund anything else - a holiday/ any luxuries/ whatever

Here's an idea of the range of costs of accommodation at Birmingham University as a guide to what could be typical.

The costs vary enormously. I guess it seems reasonable for us to to budget for £5000pa for her hall/ rent?

Does this sound right, people who already have DC at uni?

[Watertight]

Sorry, here's that link again to the directgov website

Really should preview my posts!

[nannyl]

when i was at Uni (ok 8 years ago now) my loan did NOT even cover my Halls. (My halls did not include food either)

(my Dads high earnings meant i only got the non- means tested portion of the loan)

I was lucky as my Dad paid for everything anyway (halls / fees (which then were paid in advance, not when earning) + spending money for food / copy cards /clothes etc etc)

I have NO IDEA how people are supposed to go to Uni, (if their parents cant / wont pay) when the loans dont even cover accomodation! I know that almost all my friends got the same (non - means tested part only) loan, and that almost all of our parents paid for all / most of our expenses.... but that was 8 years ago.

[webwiz]

I think the best thing you can do whatever you decide to give your child finiancially is to teach them how to cook cheap healthy meals and how to budget. DD1 is frequently amazed by people she knows at university who have to eat out/get pizzas/ready meals etc because they can't cook even a simple pasta dish and also people who blow £80 a time on a nights out and then wonder why they've got no money left. DD1 fortunately has DH's frugal genes but her younger sister - well we'll see how that goes in the autumn.

[Greenshadow]

DS is off in Sept this year and his accommodation (over £5000) is way over the loan he can get.
I naively thought the loan would cover most of his outgoings and anything we could help with would be a bonus, but no, turns out he will be dependant on us for years to come....

[MmeBlueberry]

You are so right, webwiz.

My DS survives quite happily on £15 per week. He does all his own cooking, including lunches. He is religious about managing leftovers, and he doesn't have a Costa Coffee habit.

As the eldest of six, my DS is quite domesticated. A student cookbook was all he needed.

He does have more than £15 to play with but budgets his entertainment and clothing very carefully.

I am really proud of him :)