AIBU to wonder why the UK doesn't have a culture of saving for kids' University?

[windygallows]

I'm originally from North America where 'saving for College/University' is a big part of the culture, in fact it's quite normal for parents to take a college fund out just after baby is born. And understandably - University is really expensive in the US eg (tuition + living expenses of $30,000 pa).

I've had both my children in the UK (have lived here for 20 years) and do my best to put a bit of money into a college fund every month, even if its a stretch. When I mentioned this to a few friends they looked at me with amusement and asked 'why?' I've casually asked around if others are saving for college - some have put money aside but haven't specifically said it's for higher education. I haven't pried, just asked a few people so don't have a full picture.

However I'm finding it surprising that this isn't more of a concern for parents. In the UK University isn't 'free' anymore (eg. through grants), tuition is very pricey now, grants are rarely available, and student loans are shrinking. But it just seems like this hasn't been absorbed by many parents. Or maybe it has and I just don't know!

Before flaming me - I'm aware not everyone can afford to put money/savings away and I'm also aware that not everyone can or wants to go to University, so no need to debate that. I'm just questioning the seeming obliviousness to the dramatic change in the cost of University here.

AIBU?

Merrymouse,
Private universities usually offer excellent financial aid. A majority of students in most universities receive financial aid. This can amount to the entire cost of attendance for the poorest of students.

As with all else in life, read the small print carefully, but inability to afford $60k+ per year is not necessarily a barrier to attendance.

State universities cost less but still offer excellent financial aid.

The avg debt for US students who borrowed at all, by graduation, is $28,000 (about £21k). Also, when you look at that link, ALL of the top debt burden universities are also private Unis. List of 20 with high debt figures. List of 10 with lowest debt figures includes 5 public universities.

Over 50% of students get loans, so there's a lot of debt to go around.

Even at Needs-Blind Harvard the avg debt by graduation is $32k, at Stanford it's $24k.

$20K would be your higher end of indebtedness for four years of Stafford loans anywhere. Your average graduate of either Harvard or Stanford would probably easily afford that.
Parent PLUS loans are a different matter, and then some parents take out consumer loans or remortgage.

The debt issue is what is prompting many universities to advertise 'no loan' financial aid. The issue has had a lot of attention from politicians hoping to attract the middle class vote.

(Apologies to any graduates, but I wouldn't say any of those 'top 20 for debt' colleges are desirable places to study.)

Those sources are saying those are the average debt levels for someone who borrowed at all; $28-$29k are the average among those who borrowed at all, who are about 58-59% of all students, not just those at "high end" of debt distribution.

Whether the debt is worth the degree is another question. I got my degree from a Uni "no one" ever heard of & did very well (avg new graduate debt from borrowed-at-all-students there is currently $25k). There are very many graduates from the institutions you've dissed, so obviously plenty of folk think it was worthwhile to get their degrees there.

The high end of Stafford loans is not the general high end.

Just from the first two on that list -
Adrian College has a 61% acceptance rate (rolling admissions) and a 44% graduation rate.
Our Lady of the Elms has a 79% acceptance rate (rolling admissions) and a graduation rate of 52%.
Both have relatively small endowments. Anyone spending money - and especially borrowing money - to go to either would be far better off going to a community college and living at home.

And I know that a university doesn't have to be a marquee name to give graduates a good chance of doing really well for themselves, but those two at least are long shots and there are many more like that in the US.

Low Dungeon - "I believe average student debt here is now considerably higher than it is in the US?" But the whole structure of how you pay it back differs; it's paid as a % of income over a certain threshold and anything not paid off after 30 years is written off. How much you have doesn't matter if you never pay it all off under those terms.
Springwaters - "I assumed that may children could get a student loan. I was rather surprised when I found out that based on my income they couldn't. I only found out when my 1st child applied" Every child is entitled to a loan for their tuition fees and a basic maintenance loan irrelevant of their parents income. If your income is high it won't be enough to live on but they are entitled to something.

I think it's head in the sand, not sunk in that will apply OUR children.

We put away a good amount for DS. As much we can afford. Its also at the sacrifice of other things like holiday fund for ourselves. But hopefully will have about £20,000 in his savings by time is 18. Its not specifically for education, but that or house deposit in mind. Even then I'm well aware it's not going to be enough for covering either of those things, but it's a start.

I can totally get the mind set of 'I could never save enough, so why bother!'

We just have savings full stop. Savings for anything and everything lumped together, not necessarily uni fees. As the time comes we'll use them in the way most appropriate for each child, whether or not they continue higher education. PIL have savings accounts too for each grandchild with the intention of uni/first car/property deposit etc. I appreciate we're quite lucky in this respect.

Fee loans are structured as a 9% tax on graduates.

Taking responsibility for fees depends on whether you think you or they are in a better position to pay that tax, and whether you think the opportunity to delay loan repayments because of a lower salary/having the loan written off after 30 years and a low interest loan would be beneficial.

DH started saving two years ago (DS is 11) as he did the math and realised the kind of burden it will be to DS. But we know that by the time he goes to university we would only have about £20k to help him. By the time he goes to University, that would probably only cover one year.

But it is about priorities. We realised that we can never raise the deposit for a house. So we might as well give DS a head start.

Try this for an understanding of how the fees work, and thus weather you should pay for tuition!
www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

I feel like the only person who's parents didn't save for them at all. Tbf to my mum my dad drunk and smoked most of the money but it's very much a "you're an adult now, you don't get any more help from us" situation. No money saved in an ISA here, just money I saved from paper rounds and working in Tesco which pretty much all went on securing my place in halls and freshers week.

I got my annual statement today from Student Loan Company and have paid off £111.00 in the last year. And they've added £106.00 interest. So a fiver. At this rate it'll be paid off in about 1800 years.

I can live with that! I don't earn enough to pay any more at the moment and it has no effect on my life whatsoever. I've still managed to get a mortgage, buy a car with finance help (now paid off) etc.

It would be waste for my parents to have pre saved all of that and used it instead of all the lovely things we did as kids.

Ninja Crosspost, Cel - I don't think interns or residents are considered "fully qualified" though. It's still considered part of their education, even if they're being paid for it.

Yes - it's postgraduate training, the same as here. The equivalent UK terms would be foundation doctors and specialist trainees (ie 'junior doctors').

Your original post stated that a 'fully-qualified doctor' in the US had complete autonomy, but didn't in the UK - this isn't the case.

NapQueen if it's any consolation, until very recently I was paying off less than they were adding in interest!

I now don't pay anything as I reduced my hours slightly after mat leave, and once childcare vouchers kicked in it puts my income under the £15k threshold. Just.

As the proud mum of 2 x graduates - one 25 and one 24 today! I can't understand the stress of parents saving for university. All students get a loan which pays for their fees in total and is paid back over a long period of time if they earn enough. Most students are entitled to another loan (depending on parental income) to help cover their living costs and at that point we, and most of our friends, had to chip in to help with rental costs. However it is perfectly possible to go to a university close to home so they don't need to pay for accommodation. Also anyone whose parental income is very low - or who doesn't have parental support, is eligible for a grant which does not get paid back. Their choice, their education, their future career - and salary! Most students also have a part time job when they are uni. It may come as a shock just how little time is spent at actual lectures!

I don't think university is the be all and end all.

However it is important to remember that student loans are only repaid on 9% of income above the threshold, and they are written off after 30 years.

Well it's easy for me to imagine as we come from NZ. We had fees and we went in the 90s. What you need is the living cost because the student loan living component didn't cover all you need to live. (Because they are shrinking all hte time). The fee was never an issue.

It's not a debt. It's a tax. And you don't have to repay it if you don't earn enough, lose your job, etc. It's totally different from a mortgage or car loan. And best of all, you don't pay anything if you leave the country. Plenty of young kiwi graduates do. Now we are heading out the EU, there's not a chance there will be a 'simple tax' arrangement striked.

MrsDV, I agree with you completely.

As long as my DD is happy and has considered her options I really wouldn't mind if she didn't go to university.