Affording Uni

[bustybetty]

My daughter (year 13) is considering uni. We are a normal family with no parental help (handouts) hubby is on 50K and my work is about 20K, we live in a modest house and have three teens as well. My question is I have just looked at the maintenance loan she would be entitled to and it doesn't even cover the cost of the accommodation - how do people afford this? We don't have spare money and I coupon where I can, we don't have phone contracts or gym memberships. I don't understand how most people afford to send their children to uni. Currently I'm thinking she will have to take a year out to work to be able to afford it.

ideas anyone?

Your salary is huge. Why do you have driving lessons to pay for? If it's for your DD she needs to pay for her own....my daughter did, I couldn't afford it. She worked part time for years, starting with paper rounds while still at school.

Going to University, she had to have a student loan, she also did any work she could to get some personal money as I had none. Much better...it meant she really appreciated money as well as being serious about her education.

I worked 21-30 hours a week throughout medical school. My job was evenings and weekends. The holidays were much shorter for med but I worked more hours then to fund the periods when I had to go away on placement.

It was hard but do-able. I think it made a big difference to my maturity.

I would prioritise saving £500 pcm from now on over the next year and adjust your budget/other expenditure to allow this if this is important to you. Encourage your DC to look for a job which I appreciate may be fairly hard in the present climate.

It's too late for you to turn back the clock so you can only do what you can with a year to go. The lesson here is to literally start putting aside money from birth - every little counts! I was a 90's student when the student loan came in to replace grants and it was obvious to me even back then that tuition fees and maintenance loans would only be going in one direction and it would be sensible to save specifically for this when DC were born.

@Totallycluelessoverhere

If your children were only entitled to the minimum loan delladoo then you must have a much higher than average household income. Did you not give your children the amount you were assessed as needing to contribute? Its cases like this where the parents say they can’t / won’t pay which really makes me think the govt should just deduct it from income at source and pay it to the student child. It should be mandatory seeing as they are deducting the assessed contribution from the students available loan amount.

I don't know if it should be mandatory but at the very least they should make it clear to parents that they are expected to contribute. That's what used to happen and those parents that didn't contribute were considered to be awful parents.

Your income is high but 4 children are costly. This is where you 'pay the price' for a large family. You cannot give 4 children the same as parents with the same income as you, who only have one child.
You need to prioritise. Personally, I don't think masses of driving lessons are a non- negotiable priority. They are optional, a choice you are making, which you could choose to put the funds towards uni instead. I think the children should fund their own driving lessons. It's not something they should just expect parents to cover. Can you parents do the bulk of driving practise after initial lessons?
Also even a 'cheap foreign holiday' is a luxury- maybe that's somewhere you could save?
I think taking a year out to work and save (not blow it all on gap yah activities in Costa Rica)before uni is a good idea for many reasons not just financial. It's a maturing experience and helps the young person appreciate the 'privilege' and fun of university.
However, SFE should look at their means testing criteria. Means testing is a very blunt tool. Families have lots of different circumstances. Students should be able to borrow WHAT THEY NEED, up to the maximum, to go to university, not what the govt thinks the family might be able to manage on.

I agree that 4 kids and the cost of 4 kids at uni is expensive....but you factor it into your decision making, as the fact they will all reach 18 and some at least will go to uni and involve costs is hardly a surprise.

Yes, it’s about choices which need to happen several years before and about prioritising. Essentially, parents who whose kids won’t qualify for the full maintenance (living) loan can choose to make some sacrifices when their kids are younger (cheaper holiday? Less frequent upgrade of cars? less spent on Christmas or driving lessons or extra curricular?) so they can give their kids something to fill all or part of the uni living cost gap, or they need to take on board that their kids will be paying it....and not via a loan (which isn’t available for that chunk of the living costs) but through needing to work themselves at that point.

Lots of people think it’s fine for their kids to have a few hours of work at uni and pay something, most would think that having to work significant hours at uni isn’t ideal as it will interfere with studies and the whole experience.

So most parents with the decent income Op has will choose to make some sacrifices earlier on so they can give their child something, even if not all of the gap that can be borrowed. They prioritise saving for this phase of their child’s life.

Of course some people with low incomes can’t save anything but those kids will be entitled to the full maintenance loan. It still has to be repaid and some working might still be needed.

It does seem pretty rough on kids from middle income families though, when their families say they won’t offer anything to plug the gap in what the child can borrow for living expenses.

I agree it would be better if all kids could borrow all that they need for the living expenses and it wasn’t means tested. However, I also think as a general principle that parents with decent incomes should expect to contribute something to living expenses and should financially plan to do this....but as said before, some don’t seem to realise the reality of what’s coming (lack of clear info available and also lack of checking it out themselves) and lots just don’t financially plan ahead, which is key to managing it.

It used to be a standard maintenance loan and then a means tested maintenance grant. Has this changed?
Yes, there are no grants. Loans for the course fees go straight to the uni, living expense loans are means tested on a sliding scale. The maximum living loan outside London is about 9k, going down to a base rate of about 4K for families with incomes over approx 60k.

Some suggestions:
-reduce the high cost of your children's current extracurricular activities
-go for a camping rather than foreign holiday
-get the cheapest options on all your household bills
-don't pay for driving lessons- something needed in a few years time probably
-increase your hours at work
-part time job for your DC
-DC take a year out to work
-DC work in the summer

Personal opinion, but I do think parents whose children will receive minimal loan due to their salary should plan for for this in advance. Depends on the course DC wish to do, but some are the equivalent really of full time jobs in terms of contact and personal study time.

My daughter went to uni. She lived at home petrol shared with a friend. I was a lone parent, she came out with no debt, she worked every weekend for clothes books ect, no board paid. i had mortgage car bills ect to pay, i earnt around 20-30k. You said your 20k goes on other teens after school clubs, really 20k!! i think you need to sit and take a good look at your finances. 70k joint is a lot of money.

I’m just jumping in on this thread as so many knowledgeable people on here.

I honestly only found out just how much parents were expected to top up a few years ago, I do think it should be made clearer and parents should be specifically told about it.
I didn’t go to uni myself so had no idea, I just thought you borrowed everything you needed and paid it all back later on.

I see that even if the child (adult!) lives at home, they are still entitled to some loan, what is this money meant to be for?
I assume I will still be paying for all food, amenities etc so I’m genuinely interested to find out so that I don’t end up paying for things the loan should be used for, equally making him pay for things it should not be used for

Hope that makes sense?

@fiddlersgreen

If they are staying at home, personally I'd rather they just took the loan for uni fee courses only and no extra loan like the maintenance one because of interest you also have to pay.

Honestly if living at home tbey only need to pay for transport, going out, books? Not sure on books. Having a part time job could cover that instead of taking a loan with interest

Barney60 did your daughter cover the tuition fees as well?? That is impressive! Not many people have a spare £30k lying around.

cyclingmad - the amount they pay back each month is not related to the amount they owe....see moneysavingexpert for an explanation. You might as well borrow the max...

Why do people keep talking about her getting a student loan? She cant borrow any more than 9k for fees and 4k for maintenance. I had to pay 400 a month for my dd we are on similar salary. She could only get a loan for 4k.

Janinlondon, was 6 years ago, i paid her fees, part Bursary as medical degree.

@janinlondon would you really advise your child who is going to live at home whilst they go to uni to take out a 'maintenance loan to pay for travel and going out? I wasn't referring to the tuition fees of 9k.

[quote cyclingmad]@fiddlersgreen

If they are staying at home, personally I'd rather they just took the loan for uni fee courses only and no extra loan like the maintenance one because of interest you also have to pay.

Honestly if living at home tbey only need to pay for transport, going out, books? Not sure on books. Having a part time job could cover that instead of taking a loan with interest[/quote]
That’s what I was thinking but wanted to be sure I wasn’t missing anything in regards to what the money is for.
He’d definitely need the loan for fees, I meant the means tested loan.

@Fiddlersgreen

Yup

1. tuition fee loan (given full amount to cover it)

2. maintenance loan for accommodation costs is means tested...if gour living at home there is no need to get this

3. other costs e.g. bombing books, travel, social, food, phone, laptop etc.

So if your living st home to go to uni you don't need to take the maintenance loan and shouldn't take it because
For students from England and Wales, the interest rate on Maintenance Loans is currently anything up to 5.6%. If you're still at uni, interest will be charged at the full 5.6%, but if you've graduated, interest will be charged between 2.6% and 5.6% depending on how much you're earning.

Hence live at home, get part time job to pay for other costs and then wheb you graduate your not in as much debt as others.

@cyclingmad

I don’t think it’s particularly helpful to refer to student loans in the same way as normal debts.

You don’t pay a penny back until you’re earning £26,575 a year and even then you only pay 9% of what you earn over that amount.

So someone on £40,000 a year is only paying about £1100 per year. The vast majority will never pay aback what they borrow, never mind thinking about interest.

Interest will only be an issue if you’re earning near six figures.

I sympathise op, I think there a lots of families in the 'ok' bracket where the kids get a much reduced maintenance loan, but they don't have sufficient disposable income to make up the shortfall (outgoings like mortgage etc are not taken into account, only income). In my own case, this was made worse by us living in NI but sin going to English uni (Oxford). His loan was therefore calculated & paid by Student Loans NI where the max maintenance loan is approx half that for students living in England. Plus, our income put him at the lower end. He gets approx £3k per year maintenance loan!! Luckily he was able to get a very good summer job (not allowed to work in term time) and is v good with his money

@ecosse I am not, I was responding to a particular poster on their question about what costs they would have to pay if their child lived at home. So yes it makes no financial sense to take the maintenance lost tht is for accommodation cost if you live at home!!!

I wasn't saying that in general!

If you were a student living at home why would you take a maintenance loan for living costs you dont have and have interest racking up even at 5%. Makes zero sense.

cyclingmad - yes - Its not a debt, its a tax. Everyone pays according to their income: 9% of everything earned above £26,575. So it doesn't matter what amount you owe - if you take out just the tuition loan you repay the same each month as someone who took out the full tuition and maintenance loans. Generally, the only real variable here is whether you are likely to repay it all in the 30 year time frame - which many people do not. Here's the Martin Lewis extreme example: "Paul wants to study agricultural science. His parents decide they don't want him getting the tuition fee loan and shell out £27,000 of their hard-earned cash to pay his tuition fees, and give him £20,000 to live off over three years. He graduates and wonderfully decides to go and work for a charity based in Africa for 10 years, where he never earns over £26,575. Then he comes back, gets married and becomes a full-time parent of their three children. They paid £47,000 for money Paul will never need to repay. In fact, they'd have been far better off to save the money towards a mortgage deposit for him." So if you want to help, give them the cash, and they can take the loan.

Some students who stay living at home might need to take a maintenance loan. If their parents are struggling for money then the student child will need to pay for their own food costs, travel costs, books and leisure costs. Not all parents have the money to feed their adult children. An unemployed parent without dependent children on universal credit will barely be able to feed themselves. It’s crass to think that all parents should be supporting their children as it shows a lack of understanding of people living in poverty. And there aren’t many jobs around at the moment for students to pick up.
All hospitality vacancies have disappeared. Part time shop work is scarce. What kind are they meant to get?
Better they take the loan if they need it than end up leaving their course due to needing to feed themselves.

DS is staying at home for uni and we are having to take out the maintenance loan. I'm a widow with another child at school and money is tight. As DS goes to uni, I lose child tax credits, child benefit and a portion of my widow's pension. His maintenance grant will help cover this shortfall. You can't assume that a parent can carry on financially supporting their child's living costs if they live at home for uni.
Luckily he's doing nursing so gets an additional 5K per annum which he doesn't have to pay back. He gets 9.1k maintenance loan for living at home outside London ( it's high because we are so poor!) . One year's loan will probably cover him for all 3 years- but we may take all 3 years and then he'll have £20k towards a house deposit on graduating. It would take many many years to save £20k for a house deposit on a nurse's salary..... whilst house prices increase ...Just something we are thinking about.

I said where you dont need to take out a maintenance loan you shouldn't. I never said you should never ever take one, but if you don't need to then don't.