Student loans not rising to manage rents increasing

[B00kmark6525]

What are families supposed to do?

£400 rent shortfall this term when we’re already having to pay £300 a month so he can eat. It’s a grotty tiny terraced shit heap with mold up the walls. The loans don’t cover living expenses, now they’re not covering rent.

We have 2 other children. What do they expect families to do?

Yes, I agree. The amount that every student is entitled to either via full loan or a mix of means tested loan and parental contribution is enough to cover students costs as long as they make good choices. The problem is that OP isn't making the required parental contribution so her child is left short. He doesn't have the amount he needs to live on, but that's entirely down to the OP's lack of planning/budgeting and nothing at all to do with the government. £25 per month from birth invested well has given us more than enough to cover the full top up from minimum loan for the full duration. And you need to be a higher income household to only get minimum loan - a salary level where £25 a month is peanuts.

It depends .I don't think the full loan is always enough now in many university cities and students don't always get a choice of accommodation so can't necessarily pick the cheapest. I had to give Dd more than just top up to the maximum loan.

I agree that student loans need to be increased, but if the current repayment rate is only 61% as you said, OP, I can’t see it happening. It’s too risky that repayment rates will just fall even further. Barring exceptional circumstances ( a life-changing illness, for example), student loans need to be repaid for the system to function.

My American DH worked throughout his undergraduate degree and also took out big loans by British standards. It’s serious here if you don’t repay them though, it affects your credit rating and the debt can be transferred to a collections agency.
There’s various programs to help people make at least a small monthly repayment though and if you keep plugging away, some debt may be forgiven.

I think it will be much higher than 61% now the repayment is 40 years rather than 30. The repayment also be higher if the loan company didn't charge so much interest. It is now 7.6% after the government capped (it would have been 9%)

@coffeeaddict77 That would be positive, 61% isn’t sustainable longterm.

Her rent is pretty expensive OP for that salary. Is she living somewhere trendy for non- Londoners like Clapham? Also does she need to live in a house rather than a flat? She could rent a 3 bed flat in Bounds Green (zone 3) for less than £1500 per month, so £500 per flat mate.

I have to say i’m not convinced the repayment rate will go up. In fact I think it will go down.

I was one of the years that only paid just over £3k a year in tuition. I am now 35 and still have something like 17k left to pay. It’s unlikely to get paid off or ONLY JUST paid off by the time i’m 53.

Yes people now have 10 extra years to pay it off but the fees are 3x as much aren’t they? As well as the dependency to ger a great job straight out of uni, let’s also remember women like me who go on mat leave or other women who quit work for several years and stop paying it.

The other big change to student loans is that, for people starting this September and in subsequent years, the interest will be at inflation, so the debt won't spiral out of control (until they change the system again...)

Yeah just depends really on the individual’s earnings out of uni. I remember i didn’t start earning enough for about 4 years until my monthly repayment amount was higher than the monthly interest.

It's is rubbish but it's always been an unfair system. I worked for a year before uni to pay for the first year. I worked throughout the summers. Then also took a loan for years 2 and 3. It was a struggle.
I'm now a single parent to 2 teenagers. When their dad left I knew I needed a plan b to help my children through uni. I re mortgaged our house and rented it out taking money out to buy another house. I moved into a "renovation project" so basically lived in squalor for 4 years whilst trying to make it nice and working full time and doing overtime to pay for the materials. Many years later we have a nice house but the original house was to be sold to pay uni costs. Eldest has decided not to go or he might go for free through the RAF. Youngest wants to do medicine which is a 5 year degree. He won't apply for London anyway as harder to get in to an already super competitive course but wherever he goes will be extremely expensive over 5 years so the house will need to be sold to help with costs. I say help as we will need to pay capital gains tax first so not a huge amount will be left but hopefully enough to fund most of his degree.
My point is families do need to start saving early. I don't agree with this because if your family doesn't then you are massively disadvantaged but that is the current situation. I don't want my son working during term time whilst doing medicine. I would rather do a second job myself. If he works in the holidays then great but I wouldn't push it as I would rather he could actually recover from the intensive term. I worked at uni but my course was nothing like medicine! I did 6 hrs a week of lectures. Some private reading that I loved anyway and I got a 2:1. Not remotely similar to the demands of medicine.

And life shit happens.

Anybody who has managed to save the shortfall and not touch it in recent times are in a very privileged position indeed. Circumstances vary hugely particularly in mortgage, life shit and living costs for families.

So what was the decision as to why he went straight to uni instead of taking a year out and working to save up? That was also an option

The conservative gov want to reduce the amount of students going to Uni.
They want those students now to go and work in the trades etc to fill the skills gap previously filled by migration.
These will be the working class kids of course, not the dear children of the conservatives.

With the advancement of AI it will be those skilled trades jobs that become the norm as a job. Most corporate jobs will be replaced by AI or wi require someone to just oversee something which you won't have to peolle so much money for.

And most jobs dont need a degree lets face it. I'm a project manager i do not need a degree to do my job you go on courses that certify you in a project management mentholody and thats is what employers look for. My degree means nothing.

Think there does need to be a better balance of you go to uni because a degree is needed in medicine etc. You do an apprenticeship for x y z.

A break in studying does not suit all students- academically or circumstances wise. All I’m going to say is some students are coping with a lot in life, have had shitty times and home isn’t necessarily the best place for an additional year.Some courses and SENs don’t lend themselves to a year’s break either. Outcomes wont be as good.

If the very large middle band of kids not getting maximum loans who don’t have rich parents need to do a gap year and take on the academic disadvantages that brings it needs to be more widely promoted. Funnily enough it isn’t.

How about loans simply keep up with the costs of living?

In reality because interest rates have been so ex students have probably paid a lot more back than they have officially paid back.

I meant interest rates have been "so high". If everybody did officially pay it all back, the loans company would have made a lot of profit out of ex students given interest is lot higher than the base rate.

I appreciate that sometimes "shit happens " but a lot of it is down to bad planning on the part of the parent. I always took into account that I needed to save for my children going to university and I 'm not sure everyone does.

I’m in NI where max maintenance loan has just increased to 6700 for a student studying in England or Scotland and 8000 for overseas.
I think I’m right in saying that this doesn’t seem to be as high as the figures people are mentioning for English pupils (sorry if I’m wrong).

The maximum in England if living away from home but not London is £9,978 but not many get that. The minimum is £4,651.

There is a maintenance grant in Northern Ireland as well as the loan though isn't there?

@B00kmark6525 but even if he couldn't work during term they do have long holidays. Could he not work and save up for the following academic year to help?

Maintenance grant is only for low income. I know mine don’t qualify and we aren’t particularly high income. I think but not certain that the grant makes up part of that max loan - max amount is still the same but there’s a grant part that isn’t repaid. It’s only for under 19000 or so income.

@coffeeaddict77 fair bit of difference then but here everyone is entitled to 75% of the max. The remaining 25% is income assessed.
Dd studied abroad last year before the increase in amount and her loan was t even half of her accommodation costs. It’s hard. I lived at home back in the day and got a grant - I felt like I was rich!

@B00kmark6525 did you look at accommodation in different university towns before your child went? Many of us didn’t get to go to the university of our dreams because those towns were going to simply be too expensive.

It seems like you blindly expected your DS to pick an expensive city and take an “intensive” course without actually planning how you’d pay for it.