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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To encourage DD to take full student loan to enjoy life?

76 replies

creamykayak · 13/07/2018 12:20

DD is off to a top uni and is aiming for a high paid career, so will end up having to repay her student loans.

She can take a fees loan for £28,000 which she has to do.

We can afford to pay her living costs, but she is eligible to borrow £8,000 for living costs.

She’s going to end up with £28k debt with high interest, AIBU to suggest she does take the full £8k, to end up with £52k debt before interest. I mean the interest racks up so quickly she doesn’t have much chanve to pay it off unless very very successful or until family money comes down to her.

It would mean that she’d be less stressed about working to suppliment any other spending than the basics. It’d also relieve us of a bit of pressure knowing the net is there.

Her course comes with quite some considerable travel costs and it could go to this.

‘Worst comes to it’ she could put it in the bank and use it to buy a car/ deposit/ pay for a postgraduate course.

After her 3 year course we won’t be willing/able to support her at the same level of board.

WWYD???

OP posts:
Icantbelieve · 13/07/2018 16:29

Take it. She will either get an amazing job and pay it off no worries or she’ll get an alright job and never pay that extra that she borrowed anyway

QuiteUnfitBit · 13/07/2018 16:30

Debt is debt
I'm confused. Why do you think that? If you have eg a £50k student loan, you might end up paying off a lot less than someone who has a £20k student loan.

In fact, you might take a course that doesn't help you get a well paid job, and doesn't benefit society. You never earn above the repayment threshold. In effect, you've had a free university education and living costs, as you never have to pay it back. (I'm not recommending that!)

FatBarry · 13/07/2018 16:31

The debt gets wiped off after 20 years

30 years

DianaPrincessOfThemyscira · 13/07/2018 16:35

It doesn’t get taken into consideration as a balance if you take out a mortgage like a personal loan would. It comes out of your gross pay so they use the net and don’t need to see the balance. Most people wouldn’t even know the balance tbh.

DSHathawayGivesMeFannyGallops · 13/07/2018 16:39

@Grasslands. My parents could afford to pay for my uni & taught me to fear debt. They are the ones who told me to get a student loan. They also paid for my education for 14 years before that so I actually didn't want them to pay.

MyGirlDaisy · 13/07/2018 16:40

Grasslands with the cost of raising a child to university age I doubt many parents in the UK can pay all their child’s university tuition fees and living costs out of their own pocket. Most parents do what they can to help and as a parent I worry about their loans but without them they simply wouldn’t be able to go and would be denied the opportunity to gain better qualifications. Don’t they say better qualified people generally earn more? That wouldn’t be perpetuating the cycle of poverty would it?

Ceecee18 · 13/07/2018 16:48

If she's in the UK, take it. I wish I had done and saved it towards a house deposit. I'd have had a good chunk ready to buy a house once I had a job.

SarahH12 · 13/07/2018 16:55

I'd take it tbh. I see it as a graduate tax more than a debt. And most money lenders see it that way too - my bank didn't bat an eyelid at me having around 25 k student debt and DP having around 10 k student debt by the time we put in our application.

SarahH12 · 13/07/2018 16:57

Sorry that should've said by the time we put in our mortgage application

Also to add- I did a placement year where I was paid by the company I worked at 19 k. I still took the student loan and just saved it

belleandsnowwhite · 13/07/2018 17:03

Someone I went uni with, took the loan and put it into a savings account to use towards buying a house.

chicola · 13/07/2018 17:12

Are you sure she'll get £8k if you can afford to pay it?

It goes on your earnings/savings.

reallybadidea · 13/07/2018 17:14

Thanks for all the replies. Hopefully she will get that job she dreams of. It’s at the LSE not Leeds Beckett !

Yuck.

JonSnowsCloak · 13/07/2018 17:17

Take the full amount, I say this as someone who had to as my parents couldn't afford to pay for me, when I went to uni I was the last year to pay the 1k a year tuition and my loan was 4k a year. 2nd year of uni I took a part to me job 15 hours a week which paid for nights out etc and was relevant to my degree and my career. I left university 10 years ago next year and I'll have paid it off in full because when I left the threshold for repayments was 15k and I started my graduate scheme job on 21k. I'm now earning more than twice that and pay around 220 a month which is 9 percent of my salary after tax. Although her debt will be higher, the threshold now is higher therefore the amount she pay won't be much different to mine and I just see it as an extra tax. When I stop paying it next year my salary means I'll be paying that in tax and pension contributions anyway. The interest is so low and if she earns more by benefiting from her degree then it's worth it. I didn't struggle through university because of it and I've never seen it as a bad thing.

drearydeardre · 13/07/2018 17:19

poor taxpayers on the hook for all those graduates who never intend to pay back the loan.
where do you all think the money comes from to pay for the non-payers.?

ICanOnlyLaugh · 13/07/2018 17:21

Uni graduates? Grin

44PumpLane · 13/07/2018 17:21

I just finished paying off my student loan today coincidentally!

I say tell her to take it- one less stress for her while she’s at uni. After uni if she can afford to pay it back then she does, if she can’t she doesn’t!

Talkstotrees · 13/07/2018 17:22

Interesting topic. Our DCs have had their uni fees (to date) paid by grandparents - should we be encouraging them to get loans for the remaining years & put the money into savings? I’m not sure the grandparents would approve though.

bluebeck · 13/07/2018 17:22

Thanks for all the replies. Hopefully she will get that job she dreams of. It’s at the LSE not Leeds Beckett !

Charming! She obviously didn't get her intelligence from you OP.

I know a Cambridge Graduate who works as a nightclub bouncer.

44PumpLane · 13/07/2018 17:24

drearydeardre

poor taxpayers on the hook for all those graduates who never intend to pay back the loan.
where do you all think the money comes from to pay for the non-payers.?

I imagine from all the 40%+ tax payers like me- it’s the gamble you take as a society to improve your country’s global competitiveness?

(Apologies if you were being sarcastic- I’ve commited the ultimate sin of nrtft)!!

BarbaraofSevillle · 13/07/2018 17:27

Thanks for all the replies. Hopefully she will get that job she dreams of. It’s at the LSE not Leeds Beckett

Indeed. My friend's DD who has just started a nursing degree at Leeds Beckett is just some thicko who's going to be a drain on society Hmm. Especially as she will probably never earn enough to pay back her student loans.

Catsandkids78 · 13/07/2018 17:33

Who is paying for her living costs? My rent cost 6k alone.

ChristmasFluff · 13/07/2018 18:15

Let her choose. Kids these days get lots of advice on finances - and basically a student loan is the cheapest loan there is, so best to take it that I can see.

But she'll be lumbered with it, so her choice.

Catsandkids78 · 13/07/2018 18:32

Highly recommend reading Martin Lewis / MSE blog on the topic too

QuiteUnfitBit · 13/07/2018 18:44

poor taxpayers on the hook for all those graduates who never intend to pay back the loan. where do you all think the money comes from to pay for the non-payers.?
Well exactly, but it's a fault of the system!

Employmentquestionname · 13/07/2018 18:46

and basically a student loan is the cheapest loan there is, so best to take it that I can see.
Student loan interest rates are higher than many others - over 6%
BUT
because repayment are linked to earnings, not the amount borrowed
they are a good thing

and the unpaid debts turn into Government debt to be paid by taxes later on.
Simples