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?

Under the current system it is generally not a great idea to pay your kids' tuition fees upfront. www.moneysavingexpert.com/students/student-loans-tuition-fees-changes#multiThree

I will save some money for mine, but simply cannot afford to do so right now. They have a bit tucked away in savings accounts from when they were born/presents - any cash gifts they get go in there.

I don't know what the landscape of higher education will look like in 15+ years (children are aged 1 and 3). So I'll save some money and see what would be best to do with it when the time comes - that might be helping with university costs, either tuition if we have a different system, or living costs if needed. Or it might be a flat deposit (or part of one!), or money to help set up a business or whatever. I just don't know, so it seems pointless to save specifically for university.

We're saving for both our children, they (we) can decide when they're older if it's going to be house deposit or uni or money to support through apprenticeship etc

I am 47. For MOST of my life, it was free to send your children to university. Sure, they might need some help with living expenses or something but it is v v v recent that tuition fees even existed. This is part of a slightly mad expansion of higher education that has led to a situation where you now need to do a degree to have a shot at jobs that were once available to any bright and hardworking young person. My DD is 9 and yes, I'm saving. But of course there isn't a culture of doing this because it is a very recent and unwelcome development that it has become necessary. Not sure how it is a surprise to you that this is the case, OP!

Saving for "college" hasn't entered the culture yet as it's only costed money for students/families in the last 16 years, so any who IS saving for uni, their kid hasn't even done GCSE's yet.

Additionally, a US child can expect to leave uni with a LOT more debt than a UK one, as the fees haven't reached the same extreme yet, no doubt they will though.

Personally I think it's because the interest is reasonable and if you save then due to inflation the value of what you save just doesn't make it worth it. There is a chance you may never pay back your loan, or only pay back some so I am unsure why anyone would pay upfront unless they were very very comfortable financially. I fully expect to clear my loan, I plan to work straight away but obviously there is a chance I might become ill or anything and therefore my loan repayments would stop. I think money saving expert has good info on this about how it rarely makes financial sense to pay fees upfront, and also there is grants aswell as loans for living. I expect to financially support my dc when they go for living etc but I will class that as an expense at the time, I don't have any plans to have a stash ready for them. It's not simplistic like that. If loans etc didn't exist , I'd be saving but it just doesn't make sense to me atm

We started a Uni fund for dd when she was born and 15 years on have saved a bit over 20k.

But to be honest I don't want her to use it for uni. I would rather she took loans, etc out and we helped with costs and struggle for three years and then she can use that money for a house deposit.

Student loans are treated more like a tax than a traditional loan and many won't ever be paid off

People just can't afford it

It's a relatively recent shift... Parents of children now going to uni wouldn't have paid fees themselves. For saving for college to be as embedded here as it is in the US will take a long time, if ever

There are better ways to spend money on your kids if you can afford it, such as deposit for a house, which they couldn't get on their own but they can get student loans

Until pretty recently, students were seen as adults, so they would take out loans to pay back themselves later and part time jobs rather than rely on their parents. When I went to uni, housing was cheap (north) and so was going out so you didn't really need much money. Fees were much lower than they are now. I wouldn't fancy being a student now. But then again, they all look much better clothed and groomed these days so they must be getting money from somewhere.

Its because we've only just had to start paying for university

AND we have student loans which are crazy so most graduates come out of uni with £30k of debt.

You are absolutely right. it would be sensible to have college funds.

I'd be wary of having a blanket policy that you will pay for your DC no matter what.

I met one young lady who was doing a Media studies degree at London Metropolitan University. She was self funding at £9k a year. I wouldnt pay that sum of money for such a degree.

London Met is always at the very bottom of the university league tables.

I have to say I would refuse to spend £9000 a year on fees, then hall fees, books etc for a degree like that. My DC would be on their own financially if that is what they wanted to do.

I'd be wary of having a blanket policy that you will pay for your DC no matter what.

I met one young lady who was doing a Media studies degree at London Metropolitan University. She was self funding at £9k a year. I wouldnt pay that sum of money for such a degree.

London Met is always at the very bottom of the university league tables.

I have to say I would refuse to spend £9000 a year on fees, then hall fees, books etc for a degree like that. My DC would be on their own financially if that is what they wanted to do.

I'm not sure you actually understand how university gets funded here OP. Fees are paid by loans, government guaranteed (yes even those that get sold on), and will be the cheapest way of borrowing anyone will ever get. So there's actually very little financial point in the parent paying the fees upfront. Add to that the fact that fees have only been so high for 4 years means there has been no need for parents to save fees. As I understand fees in the US have always been very high and there is no automatic access to means of funding.

On the question of living costs, again loans cover the basics, again favourable terms. However a well off family IS expected to contribute over and above the basic £4K amount. This has always been the case and parents generally do support their children this way, either from long term savings or just from their usual income.

Finally house prices are far higher here than in the US, so parents who do have long term savings often earmark it for a property instead as getting on the property ladder is often perceived as far more difficult than funding university.

I'm not sure you actually understand how university gets funded here OP. Fees are paid by loans, government guaranteed (yes even those that get sold on), and will be the cheapest way of borrowing anyone will ever get. So there's actually very little financial point in the parent paying the fees upfront. Add to that the fact that fees have only been so high for 4 years means there has been no need for parents to save fees. As I understand fees in the US have always been very high and there is no automatic access to means of funding.

On the question of living costs, again loans cover the basics, again favourable terms. However a well off family IS expected to contribute over and above the basic £4K amount. This has always been the case and parents generally do support their children this way, either from long term savings or just from their usual income.

Finally house prices are far higher here than in the US, so parents who do have long term savings often earmark it for a property instead as getting on the property ladder is often perceived as far more difficult than funding university.

Because fees don't have to be paid upfront. They are paid back when you earn enough. If you don't earn enough, you don't pay anything back.

As someone else said, it's not a loan, it's a graduate tax.

It would make far more sense financially to put the money towards a deposit for a house. The return on a house is far more than any interest on the "loan".

We've started stashing some money for our 6 month old. She'll be able to spend it as she wishes but I see nothing wrong with getting through uni using student loans as I did. It doesn't feel too much of a burden paying a bit out of my salary each month and the interest is next to nothing.

Mine are at uni in Scotland, so no fees. However, they have both taken out the maximum non-means tested loan and are choosing to live in city centre flats. When they graduate, we (DH and I) will pay off their loans, but they don't know this, as I want them to learn to budget and live within their means. They both work as well.

There are two reasons for this - A) I don't want them to be saddled with debt as they start their working life, and B) I think it's morally right to pay this off when we can afford to. Realistically, one DC may never be eligible to pay back the loan. Certainly, if we were in England and paying for fees too, I'd have discouraged this degree. It's a privilege for students to study something they are interested in, rather than something that will guarantee a job. I don't expect other taxpayers to foot the bill for this privilege.

it's been free for so long, and then low cost compared to US. Oxford's tuition for a year £9000 compared to Harvard's $60000. Yikes.

Realistically, one DC may never be eligible to pay back the loan.

So why on earth would you pay off cheap low level debt that may never have to be repaid anyway?

We don't save anything for our kids' university as we are both still paying back the loans for ours! When you're struggling to pay for today you don't worry about tomorrow....!

We do plan to help with living costs a bit but tbh we see our job as parents is preparing them to live on their own and pay (or get into debt) for themselves as adults, like we both did. Both of us got part time jobs at uni as well as loans. Both of us needed some help from parents when we realised that spending the loan all at once on parties wasn't going to pay the rent but then we learnt that lesson and all was well.

I left home at 19, my sisters at 16 and 17. Dh was 18 . When we left for uni it was not expected that we would return home again but that we would get a job after uni, get a crappy house-share in our 20s and then move up as job prospects improved.

I do think our kids are going to struggle with the high cost of rent and we will help as able - I did in fact end up moving back to my parents rent -free for 10 months to get a house deposit and would be fully prepared to do the same for our kids. But I can't ever see that we would have the money to give them.

We've just had a DS and have set up a 'university fund' for him. DH and I left uni 10years ago. Fees were £1200 a year max and you got a minimum £3000 loan if you applied. That covered rent with some left over (about the amount for fees).

It's pretty recent that fees have gone up to an extent where the loan is becoming prohibitive. I left with a £12000 debt, it's about £60 per month. I'll probably never pay it off due to working in local government.

Now loans total £35000, which starts to become prohibitive. Who knows what it will be in 18years when DS goes.

titchy - i do understand how it works BUT I don't think in 15 years time the structure of the 'Student Loans Company' is going to exist in the format it does. eg. interest rate is too low/unaffordable, many people default so huge losses. I just can't see how they will keep going and how the govt will effectively provide a service of allowing people to pay tuition sometime in the future. I think they'll expect 'student consumers' to pay for it up front - and if you haven't finished paying your tuition, you get a bill at graduation instead of a diploma!! :)

Our DC are 10 & 12. I haven't figured out how to deal with funding university yet - we're currently paying school fees. I'm not sure university will be significantly more expensive.

I think the UK is way behind in scholarship programmes as well. These are very advanced in the US and something for students to strive for. Here if you're very academically strong you hope you can get into a good programme but beyond that there is no reward or incentive, IYSWIM.

Tuition loans are a very recent thing, takes time to build up a 'culture'

I think the UK is way behind in scholarship programmes as well. These are very advanced in the US and something for students to strive for.

Have you actually read all of the other posts op?

Tuition fees started in 1998 at £1000 a year. Only in 2012 did they go up to £9000.

The children born when £9k fees came in are now 4 years old.

Why the hell would huge scholarship programs exist when fees have only existed for less than 18 years and they were very cheap until 4 years ago?