Cost of kids at university

[MumofCandR]

I have 2 kids one may be in university in around 4 years and the other in 6 years. I'm trying to estimate how much to save up to help them through and I can't work out what's a reasonable amount. We are high earners so would only qualify for the minimum grants/ loans. I currently spend around 125 each a month on clubs and similar each on food. Clothes probably average 50 month each so probably 300 month spend per child that we won't have when they're at university. Did you contribute more when they went to University and was this significantly more? I'm thinking it's probably going to be 800-1000 month per child on top of maximum loans, does that seem reasonable?

It is real debt for some though, people keep saying it isn't, but Dd has been paying back from her first wage packet as a teacher (from Sept last year). It reduces her available income for how much she can borrow for mortgaging etc.

A lot depends on the city. In Leeds with a lot of individual contracts being available through Unipol I’ve never had to guarantee.

when dd was in London there was no choice at all. You accept joint and several guarantor liability or you pay double/triple the rent for private halls or you simply don’t get a property. There is a shortage & students are competing against professionals for house shares.

Getting a job is much more difficult for students now. Employers are less flexible, often demanding 20+ hours (due to the high cost of employment) and don't allow term time only.

The one thing the government could do is to make employing a student much easier for employers, given incentives such as reduced NI or no need for pension for someone in a 3 year degree course.

Several of my daughters friend regularly have to miss lectures & tutorials because their employers are not flexible.

saying that I’ve never paid for gym or Netflix. I don’t even have Netflix myself.

Our expectation is absolutely that our children will work, as we did. Neither of us had any help at all and so worked thirty hours a week around full-time medical school. We don’t want them to work as much as that as it meant very limited socialising, which is a huge part of the uni experience. But we certainly wouldn’t think not working at all an option, and I’d feel I’d failed if my children thought it was an option too.

My own experience was that those who hadn’t worked struggled when they first started working after uni, and had very silly ideas about money. I don’t think it does adult children any favours to protect them from the reality that work pays for things.

Who here lives near a uni

I think I’ve said before, my daughter worked for 3 years full time before going to uni & she still can’t find a job there.

I work very close to one uni and live about half an hour drive away from another.

DS live away in yr one.

He got the student loan for fees. The minimum loan for living (think it was about £4k)

We paid for his halls for the year £7.5k. you have to pay in 3 instalments - Sept, Dec and March. Uni started mid Sept and he finished mid April.

This year he has travelled in the train and lived at home so no loan for living and no payments from us. He buys a monthly rail ticket, think it's about £200. We pay for everything at home including phone.

He had a part time job and earns well for only working weekend and summer. He's already paid back the 4.5k maintenance loan and hopes to settle some loan fees too when he finishes as the debt is huge and interest is being added already.

DD is looking to go next year. We've offered her the same halls fees for year one. After that she'll need to cover the rest.

We couldn't afford 3 or 4 year x two DC and we also want them to stand on own two feet and learn about money/living costs and giving them thousands won't do that.

I'm glad people are waking up to the real debt students will have when they leave Uni. A degree costs around £75k (3 years at 25k). 10k accomodation, 10k Uni fees and 5k living expenses.

If a students takes the minimum maintenance which is circa £15k per year then they leave with in excess of 45k debt as interest added from day1. It does get paid back, anyone who works in payroll can see the numbers deducted from salaries and it does make a difference. I can remember getting my first pay after Uni and I would have felt the impact of the "student tax", especially in those early years when you are trying to build a career.

My advice, to students and parents, choose your Uni course wisely. Doesn't mean you can't follow your passion or you have to chase monied careers but consider and research what jobs will be open to you post graduation.

Of course it is REAL debt.

Calculate how much they will pay earning just 35 or 40k a year. (Most grads should be earning more than this in the first few years). Multiple that by 40 YEARS!

If you can avoid taking any of it, such as the maintenance element by getting a job before or during it saves literally thousands in interest.

It's basic maths which is why many are looking to see if they can pay off the loan quickly and save all that interest. If you can pay off 30k student loans in 5 years say rather than the minimum over 40 years you are literally saving yourself thousand in interest.

My daughter was at Leeds uni and living in a shared house in a rough area. I paid her rent as I was worried about her walking home in the early hours. It was 2016 and I was paying £433 pcm, including bills.

Ds pays about £150 per week in a shared flat in the city centre. Houses in places like Headingly are around £120-140 per week at the moment.

When our first child went to uni they got minimum loan and we topped up to maximum loan. Their accommodation cost meant they were left with £100 a week term time only which is 30 week, 10 weeks a term plus an extra for Freshers. This was more than enough for them. But they were more buy some beers in from the supermarket with everyone hanging out in the kitchen than going to the pub or out for brunch.

They also enjoyed cooking from scratch. We kept them at £100 per week for the rest of the years. Ds2 is also at uni, his accommodation costs are higher which technically following the same topping to maximum loan meant he would get £75 a week so we give him the £100 as well as he cannot help the cost of his accommodation.

The main thing lots of people forget is laundry costs. In first year Ds1's tumble drying was free so they only paid for the washing machine. Mine do 2 loads a week, one clothing, one bedding and towels. Plus tumble drying costs. Usually universities list their costs.

Supermarket food wise Ds2 spends £38 ish a week and cooks from scratch. We provide toilet roll, kitchen roll, tissues, shower gel, shampoo and laundry pods. We shop at Costco so when we travel to collect him we take all this in an empty case for the term or longer.

Then there is the usual Netflix, Amazon Prime, Spotify, gym stuff they may also want.

Both children understood the cost of food way before they went to uni, could cook and for Christmas will ask for Uber Eats or Deliveroo vouchers for a take away.

Conversations about expectations started way before uni. There was no way Ds1 could have worked in term time due to the number of contact hours he had (STEM) and he had work over the "holidays" too. However at least half of all students do work from statistics.

DS is on the minimum maintenance loan. He's at UAL and now lives in a shared house in zone 3, which works out much cheaper than halls.

We pay his rent, a weekly allowance, phone and occasionally train fare home. First year was difficult as he struggled with budgeting. This year he's much better and doesn't ask for top ups any more.

We are probably funding £1,500 per month. Not a small amount.

I don’t think 1k a month will be enough if that is to include rent. Maybe depends on the rent in that particular city. Where dd is which is northern there’s nothing under £700 a month. Then bills on top of that. Bus fares, food, toiletries, they need some form of social life.

And food inflation is biting. Dd said in September she was spending £40 a week on groceries. Now it’s nearer £60.

It real debt, real mental load - that many of us never had to deal with

Over the last 5 years with DC at various universities top up for us has been c. £900-£1000 per month to cover accommodation & bills with them living off minimum student loan.

There are loads of variables involved with uni choice, how accommodation is allocated, local market forces determining prices for private rentals beyond halls. There are always loads of questions about how much students ‘need’ to live which again varies massively. Some are used to free school meals and little food at home and others 3 freshly cooked meals a day. I didn’t want my DC to go from a lifetime of balanced meals at home to being forced to eat pot noodles & beans on toast just to survive. You also can’t bank on them being able to get a part time work. Some courses are not conducive to working alongside and others just can’t get a job despite trying really really hard.

Having early discussions around expectations on both sides is what I would recommend. Unfortunately, it’s so easy for everyone to get swept along and realise too late that if only a conversation had happened before 6th form their subject choices at A level or equivalent, degree choice, uni choices etc would have been so different.

@Ggfgh we live within ok commuting distance of 4 Universities. DS attended one of them and lived at home. DS thankfully got on a degree apprenticeship programme and his employer paid his tuition fees and a wage. He graduated last year, he would have been entitled to minimum loan, we had put aside 30k and would have paid for his phone, gym membership and sports team costs. He actually paid us some rent and paid for all his own stuff. We don’t need it but it was a life lesson in paying your way. We will be adding the 30k to the house deposit he will be given.

Lovely

If you take out an ordinary unsecured loan you are looking at repayments of £1000 pcm for 5-10 years for the £50k debt and it’s not cleared until the capital sum is paid back, so completely unaffordable as a means to fund a degree. As it stands you cannot get an unsecured loan anyway for that amount. A secured loan for the same amount would involved £350pcm repayments for 25 years… MORE than you would likely pay back on the current loans on an average grad salary.

This is a graduate tax, effectively. Yes, you will be paying a few hundred a month back via PAYE BUT the capital amount will ultimately be written off. In the interim, as a graduate, you earn £500-1000pcm more a month in a graduate profession with more career progression possible … so you are still thousands of pounds better off per year over the course of your lifetime.

Yes, the fact that you will have a monthly outgoing will be considered in mortgage applications - but so is the higher base salary you are earning as a result of that degree or any loans you take out instead (or credit card debt/overdrafts that you may incur as a result of not taking the grad loan). Given a choice between paying that money off/not taking the loan and saving the money and using it as a house deposit instead, the financial advice is still to invest it in a property, not to replay the loan. It isn’t a loan/debt in the same sense of a credit card/overdraft/mortgage.

£10K over 10 months. We try and find accommodation with a 10 month lease so the £1000 per month can cover accommodation, phone and travel. All food and social is paid by DC working in the 3 months of holiday. He tries to earn £4000 over the summer which then gives him £400 a month for food and expenses.

I'm not talking about an unsecured loan.

My DS has worked since leaving schools at 16. He's hoping to pay off lump sums off his student loan and may not even take out the loan for year 3 fees.

If you do the sums and can afford to clear the debt sooner you will literally save thousands of payments over the next 40 years. Even paying 250 a month for 40 years it's 120k versus 30k quickly.

Everyone needs to do their own research and make their own decisions based on their circumstances but people really need to stop thinking of this as a graduate tax. It isn't. It's a debt like any other and it will be there for 40 years.

Neither of our two local universities offer the subject that Ds is studying.