Student loans - options?

[SM33]

Has anyone managed to get their heads around the student loan system? So confused, by all the different advice. We are hoping to help DC with some of the cost, so perhaps getting DC to take out the loan for maintenance and then we pay the fees. The fees I think I can be paid in instalments which, I think would be manageable. I’m aware that ML advice is not to do this but can’t quite work out why! I don’t intend to help DC with house buying but would rather they weren’t heading into life with lots of loans!

We intend to pay course fees, and are lucky in that our daughter will live at home. Yes you pay in installments, so if a loan is needed for later years that is do able too. Yes the advice is take the loan, however we (dd and dh) don't like the idea of the everlasting loan, the 'extra tax' for life and as we are able to pay (def this year, likely year 2, hopefully year 3) then why not? We have just her to consider, and will probably be able to help with house buying too, although she has a LISA funded from her CTF building nicely too. She has a weekend job and is pretty sensible with her money. We are not high earners, but never had a big mortgage and have always been quite frugal.

Presumably you’d also pay them some maintenance as they won’t get the full loan?

The new plan 5 loans have interest rates the same as inflation, so in theory the amount in real terms won’t change.

Their repayments will be exactly the same though regardless of whether you paid their fees though, given that they’ll have the maintenance loan, so bear in mind they won’t benefit from your decision for many years.

If they wanted to buy a property they’ll still find the amount they can borrow reduced because they have a loan, and there wont be help with a deposit from you, so almost the worse of both worlds.

Hence why ML suggests not doing it!

I think if you can pay without negative impact to yourself you should. I do not agree with the ‘it’s just a tax’ attitude- would you like a 9% tax on your earnings?
Out of circumstances my DD has to take both loans. She could possibly get away without the maintenance loan next year (she is super frugal) but her bursary is tied to it so will take it out with the option of immediately repaying it so as not to incur additional interest.
She is likely to want to get a masters eventually and I have heard of some people taking the loan and saving it to pay for the masters (where the loan is capped) but more likely she will work and save rather than see the interest accrue.
If my DD lived at home she wouldn’t need the maintenance loan at all. I’m always surprised that people still take it (obviously if very low income it may be necessary), as costs are not much higher, food being the main one. My DD works over the summers to pay for anything the loan didn’t cover, and would have a surplus if living at home (she actually has a surplus now, despite her rent costing close to £10k).

do not agree with the ‘it’s just a tax’ attitude- would you like a 9% tax on your earnings?

Just to point out - it's not 9% if earnings.
It's 9% of earnings above the earnings threshold. Not sure where that starts for Plan 5 - above £25k?

Op everything has changed recently re sl and especially Martin Lewis

If you start to research you will see people even blaming him for the mess they are in having been mis sold loans.
It's a huge issue at the moment and people are lobbying the gov about loans.

@SM33 there have been many threads on this topic, most recently here: https://www.mumsnet.com/talk/higher_education/5509565-question-for-those-who-are-paying-fees-upfront-or-considering-it