Paying back university tuition fees - what happens if DD becomes a SAHM?

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Does anyone know the answer to this? If my DD (currently only 3!) were to go to university (and end up with large debt), would she have to pay the fees back if she gave up work and became a SAHM? Does anyone know?

As I understand it, you only have to start paying it back when your income reaches a certain level and if it drops below that level you stop paying I believe its written off at some point too (though a long time later)

Faint is right.

Repayments are means tested.

You only have to pay anything back once you're earning 21K. And if you haven't paid it all back by the time you're (I think 55) it's written off.

The repayments are means tested each year- so I am only repaying £100 or so a month now I'm part time.

If they keep the repayment scale the same and massively increase the amount borrowed I reckon loads of people will end up getting part of their loan written off.

I'm nowhere near paying mine off and I only borrowed 9k and have been working for 10+ years!

The interest still accumulates even if you are not in a position to repay

Would you still have to pay the interest back when you're 55?

The current scheme is that you only pay when your earnings are over £21k. If your earnings subsequently drop below that amount you stop paying and the rate of interest drops to match the rate of inflation. Any amount outstanding after 30 years is written off. So if your daughter becomes a SAHM she will stop paying. Of course, the scheme will probably have changed several times by then so these answers will almost certainly be wrong.

Just for clarity, everything is written off after 30 years including the accumulated interest.

What if she moves to Nottinghamshire and wins several million £ on the lottery and never works again. Will she have to pay if off then?

That is probably unlikely to happen but what happens if graduates move abroad and never come back to UK?

Tbh who knows the scheme has changed so much already how do we have any idea what will happen by the time our LO's go to uni or beyond.
I was on the 1st year they came in but have welsh loan so even that's got slightly different terms than the English one. It's probably not worth second guessing.

You really are planning ahead, OP! If she is a SAHM, probably not something she will be doing for 30 years, she will not repay during that time. It is means tested by the individual so, even if she has a rich husband, she will not be repaying.

If you win, several million on the lottery, your interest alone may take you over the repayment level and unearned income is taken into account. If you move abroad, you are not supposed to just disappear but you should keep the student loans people informed.

Between me being 3 and going to uni there were so many changes, at the moment a SAHM would pay nothing, but by the time dd is old enough for uni who knows?

Yes, no point second guessing what may happen in 15-20 years time.

It would only take a policy change for govt to decide that - for instance - someone married was assessed as part of a couple, even though they are currently treated as an individual. A present they don't backdate rulings, so whatever applies when you take out the loan holds good. But again, it would just take a change in the rules for that not to be the case.

(I'd guess that there would need to be certain level of support for any change, and that a conservative govt. for instance, wouldn't want to punish people for getting married, but it's really just guesswork).

If you think how much has changed in the last 20 years, anything could happen.
If the current thinking on housing benefit is any thing to go by (it's been suggested that anyone under-25 should move back in with their parents rather than claim housing benefit) they could even decide decide to hold parents responsible for their children's student loans.

I'd be surprised if anyone could afford to be a SAHM in 20 years' time.

And, as psammyad says, independent taxation could bite the dust; the axing of child benefit to families with one higher-rate tax payer has busted through that.

There are so many loopholes in this student loans business that there is bound to be huge movement of the goalposts. As it stands, vast numbers of students could be shuffling through poxy courses at poxy institutions, running up fees of £9k a year, and never work again, or only find work in low-paying jobs. As OP points out, a SAHM could avoid paying, and many other students would hop off to work abroad. Also how on earth is the state going to hunt down Euopean citizens who are entitled to study here and then disappear off into the Greek/Spanish/Italian ether?

OP, the system may be dramatically different from now in 15+ years time.

OP - start saving for your DD's education now!

Not getting at you, Yakbutter, but it is a poor system that lets many students through without paying a penny. It means that those who do earn over the threshold have to pay even more.

Why do a degree if you don't intend to earn enough? What is the point? Four years of partying at someone else's expense?

I know that many people have extenuating circumstances and the system needs to make allowances.

Bonsoir - best advice.

A lot of the difficulties in the UK is that the loan system is relatively new. I know that when my DS1 was born 20 years ago, there was no need to save for university, so we didn't.

If you look at a similar family in the USA, they would have all sorts of tax efficient savings plans for university (educational IRAs).

It is very hard on families to spring this system on them. If we knew when our children were newborn that we needed to pay for university, then we would have taken appropriate steps. When you give us one or two years' notice, it is totally different.

My personal situation is that we have paid for private education throughout and we are looking for respite. We want to hand over responsibility for finance to our children, and so expect them to take out the maximum loans they can. They do so with the burden of having to pay them off. If they find good jobs, the should not be an issue for them.

No she would get a free education thats the stupid part of the system or at least that is the system form Sept 12

We've been told the govt knows it's not going to get most of the money back in terms of loans repaid. That's partly why they're allowing richer families to pay off student loans immediately - at least they do get that money back, whatever the student goes on to do with their life.

We were very lucky and had the option of making a highly tax efficient gift to the three DCs a few years ago, so they each have a sizeable sum in the bank that will cover the cost of their HE. Anything could happen and they would still have that money to ensure they got a good start in their adult lives.

It takes a huge burden off our minds and I would encourage any of you who had the option to put money aside for your DCs to do so.

ClaireAll - If they don't find good jobs they won't have to pay back the loan in full. They will pay 9% of any amount they earn over £21000 for a maximum of 30 years. If they pay off the loan within that time the payments will stop. If they don't any amount outstanding at the end of 30 years will be written off completely, even if they haven't ever paid a single penny.

Last time I saw the numbers the estimate was that most women under the current system would not pay back their loan in full, and would have a certain amount written off at the end of 30 years. Most men would pay back in full, but a large minority wouldn't.