What will uni costs be now if child has savings? Thresholds and fees?

[SprungisSpringYaY]

I'm just wondering what people have worked out uni costs to be now if a child has savings over 20 grand?
Will they have to fund it themselves? I recall a figure of about 9 grand a year for rent..
And they have to pay fees on top?

£9000 a year is the tuition fee’s. I think it goes from parents salary. We will be doing this next year but my son’s dad has saved enough for his 3yrs at uni. He’s very lucky

You'd be better off speaking to the university in question and the student loans company.

Darbs, that's great... How much does he need /managed to save?

Uni fees are currently £9,250/ye. All students are awarded that if they apply. It goes straight to the uni.

Maintenance loan is based on household income. I don't think student savings are considered. Full loan is about 9k. Minimum is about 4.5k. For most places the minimum loan doesn't even cover accommodation rent. Parents are expected to top up to cover food, bills, travel, course costs, social life etc.

For most students, I understand the advice is to take the loans rather than pay up front. Google Martin Lewis on the subject - he explains it all very clearly.

The above applies to English students -Scotland and Wales have different systems.

Thanks for see line.

I've been all over Martin Lewis and whilst I know for some people this will be ideal.. Having had the burden and back ground worry of a loan myself.. I'd prefer my dc to either pay it all outright or not go.. Or take very small loans.

They are not near uni age at the moment... They have good savings and I'm wondering what sort of target they may need to cover them comfortably for uni and costs...

Students are eligible for an annual £9250 tuition fee fee loan regardless of income/savings.

They are also eligible for a maintenance loan. The amount they are eligible for is assessed against household income. This can include interest earned on savings (unless it’s trivial) but won’t include the savings themselves. So £25,000 in savings won’t be included, but the annual interest (say £100) would. As the interest is likely to be a few hundred at most, I can’t see this impacting the loan amount.

To cover all costs and not have a loan they will likely need around £20K per year. So £60K for a standard 3 year degree or £80K for a masters.
That would cover tuition fees, accommodation, bills and food and some spending money. They will need more if in London or if they want a larger amount of spending money.

Fees are £9250 a year. Living costs obviously vary enormously but the maximum loan of about £9k a year is probably a reasonable guide. So for a 3 year degree that is about £82k. The amount of savings the child or parents have is irrelevant to the cost. The parents earnings influence how much the child can borrow for living costs.

Bear in mind that the majority of graduates never pay off their loan, so it is cheaper than it looks. And obviously those who earn less pay less, so that reduces the risk. Plus student debt doesn't damage your credit rating etc. It's much more like a contribution/tax than a loan. If your kids end up being high earners then they will be better off paying up front, but it is a bit of a gamble.

In a way the worst thing you can do is take out a small loan and you WILL pay that off. Each extra bit of borrowing is cheaper in the sense that you are increasingly less likely to actually pay it back.

I'd prefer my dc to either pay it all outright or not go.. Or take very small loans

Unless you know they're going to go into high paying careers and stick at those careers for decades, this is likely to commit them to pay money they don't need to. The majority of people won't pay off all their student loans.

If money is available, in almost all cases, it would be better used for a house deposit, topping up living costs or put into a pension not avoiding student loans, which should really be considered as a graduate tax not a debt.

Another option you could look at if you're a high worth family would be for them to buy a property to live in at university, instead of renting. But obviously need to look at costs of doing this (stamp duty etc) especially if you'd expect to sell the property after they've finished rather than continue living in it or renting it to other students.

@SprungisSpringYaY

Thanks for see line.

I've been all over Martin Lewis and whilst I know for some people this will be ideal.. Having had the burden and back ground worry of a loan myself.. I'd prefer my dc to either pay it all outright or not go.. Or take very small loans.

They are not near uni age at the moment... They have good savings and I'm wondering what sort of target they may need to cover them comfortably for uni and costs...

Student loans are not like any other debt. Plan for them to take out as much as you can as a loan and then top up.

That's very interesting thank you.
I would hope they can pay outright for uni fee and accommodation and get part time jobs to fund themselves through if needed..

It's eye watering sum however when that could be invested into their own home!
One I think would go to uni and do very well, the other I'm not sure yet.. Could use it to do apprenticeship or house deposit..

Yes but as I said.. I personally find it a mental burden and having to find the info each year to defer. The fear of having to pay it back at various stages..

Barbara of seville..

No myself and dh are no where near high worth, they have small inheritance..

Having had the burden and back ground worry of a loan myself.. I'd prefer my dc to either pay it all outright or not go.. Or take very small loans.

Student finance in the UK doesn't work like that, it isn't treated as a typical loan and instead more of a tax band. Your son wouldn't pay it back until he met a minimum income threshold and his payment would be based on earnings. If he was out of work there is no payment taken.

There isn't really a burden with the student loan and arguably the bigger burden is to save ~50k before he can attend university.

Why commit to spending 60k or 80k per child? Martin Lewis advice is very good in this area. Currently we pay circa £5000 ish for rent to top up dc student loan (9250 fees plus maintenance loan of £4500) DC know they will have this loan to pay once they reach the earnings threshold . Most families cannot afford 80k per child over 4 years. Next academic year we are paying 10k for both DC top up.

Plus of course we feed / provide for them when they are home which is about one third of the year too!

In the nicest way, just because you find it a burden it doesn’t mean they will. I don’t even think about mine and I got the maximum everything. It comes out of my wage automatically like a tax, I could never fall behind because of my earnings drop then I don’t have to pay.

I’m 30 now and still saving for a house deposit and am wasting money each month on rent. If I had any money I would have preferred it had been saved for a house deposit so that I have security.

@SprungisSpringYaY

Barbara of seville..

No myself and dh are no where near high worth, they have small inheritance..

In that case, the sensible thing would be to take the loans. If you don't have the means to help bail them out if they end up not having enough savings that would put pressure on them. What if they wanted to change course after the first year? What if they had to retake a year? What if they wanted to do a 4 year course? Not all unis allow part time jobs. Some courses are so full-on, it is difficult to have a part time job.

I think the vast majority take the loans. Most people have student debt - it is part of life. I think it would be great to start life after uni with decent savings behind you.

Honestly, it would terrible financial advice to tell your DCs to use their savings to fund uni entirely, when they could use the money as part of a house deposit/for life emergencies. No other debt will ever be so cheap and the repayments only when you're earning. I understand why debt makes you anxious. Just teach them healthy money management.

In total, to cover it all for a three year degree outside of London you’re looking at 3x £9250 (£27,750) for tuition but this may have increased by the time your child attends university.

Maintenance is harder to predict because it varies depending on whether the student is living at home or away, in or out of London and what their household income is. The max loan a student can get (living away from home in London from a low income family) is about £12,000 a year. This student would leave university with nearly £65,000 debt.

A student living outside of London with a high household income would be looking at a lower maintenance loan - maybe £5000 - but it is expected their parents contribute to make it up to £10,000/12,000. This student would have an overall debt of about £45,000 but their parents would have given them about £20,000 (or they would have got a job).

If you want the whole lot to be covered, they/you will need savings of around £60,000/£65,000 for a three year course.

Rough idea is about £10,000 a year tuition plus £10,000 a year living costs.

Yes, unless you know they will definitely be very high earners they should take the loan for maintenance as well as for fees as the majority of students will never pay back the full amount. Our DC borrows the £9250 for fees plus the figure of about £4500 as our income is too high for him to borrow more. We make his maintenance money up to the figure that those who can borrow the maximum get, which if they’re living away from home and outside London is over £9k so we give him £5k a year.
Parents who don’t work in unis as I do or don’t have friends with DC who are already there often don’t know that their income will mean that their DC can’t borrow even enough for basic hall fees in most cases. I have quite a few students whose parents can’t or won’t give them anything so they have to make up the gap by working- much harder at the moment. And I have plenty who stay at home as they can’t afford to live anywhere else. They take the maintenance loan that they can borrow and give their parents a contribution for their keep and manage with the rest. That’s ok if you’re in a city with 3 unis and huge choice of courses but not if you aren’t.

We pay ds’s costs (not uk resident when he started at university)
9250 in fees
Accommodation in halls was £145 per week and we paid for 40 weeks as we were still overseas
Accommodation in his second and third year (he will graduate this summer ) was about 4.5/5 k as it’s for a full year including the summer months when he was not resident.
We gave him £300 per month for living expenses at first, but then dropped to £250 once he had a better idea of costs etc.
Ds did not work during term time, but completed two internships over the summer break which were quite well paid.

With mat leave and not earning above the wage threshold to pay back for a few years, I haven't had to pay back my SL for a few years out of the 25 years mine is hanging over me for. It really does work like another tax on your payslip - the money comes off automatically through your employer. Paying off student loans is a waste of money if you aren't actually going to owe it. I would definitely put the money to property which is a way more beneficial investment, otherwise your children are going to be wasting far more money on private renting over the years.

Mortgage companies and banks don’t view student loan debt in the same way as any other debt. Martin Lewis has written extensively on this and argues that it is FAR better to take the loans rather than use up savings. My loan is basically like a graduate tax that gets deducted off my payslip each month. If I ever earn under the threshold, I don’t pay.

Yes but as I said.. I personally find it a mental burden and having to find the info each year to defer. The fear of having to pay it back at various stages..

When did you take your loan out, the arrangements regarding repayment have changed considerably over the years. Literally the only correspondence I ever had with the student loans company was a yearly statement. The payments were just a line on a payslip. When I wasn't earning I wasn't paying.