University Finance

[Janh]

i don't know how many parents of 17+'s are using this board, but for any that are, or any coming up to university - are you aware that the allowance against income for each other child at home is £79 pa? and that it has been at this level for over 30 years?
when your child leaves school you lose your £10+ a week child benefit - which nobody pretends is enough to keep a child of any age - and yet this is all they allow against tuition and student loans.
anybody want to start a campaign????

My kids are well off university age but I've started saving for it now as I can only imagine the situation will get even worse. Even so i'm sure the amount I'm tucking aside will be insufficient. I thought it was outrageous when tutition fees started to be charged. I can see this really hitting the middle earnings band...after all those with high earnings will be able to pay and lost with low earnings will be able to claim.

A friend of mine shoved her divorce settlement into an insurance policy which is now paying for her 2 boys to go to uni. I wish I'd listened to her way back when and taken out a policy then, instead of paying quite a lot for one now!! My daughter has announced she will be going to uni and rather likes the look of those nice young men rowing on TV recently!! Oh Lord dreaming spires etc etc! I can't begin to think what going to university will cost for those people whose children are babies now, its bad enough now.

for people whose children are small now there is plenty of time to take out endowment policies against future costs - it's a bit harder when you're suddenly hit with it!

the "middle earnings band" is exactly where it hurts. mortgage payments aren't allowed but pension contributions are. so - given 2 families with a prospective student and an income of around £30,000, but one family has 1 child, a paid-off mortgage and pension contributions of £500 a month, and the other has 3 other children, a mortgage payment of £500 a month and no pension contributions, the first family can take £6000+ off their income against tuition etc and the second family can take £237 (3 x £79).

there is another, even worse anomaly. if the parents are divorced and the wife has remarried but doesn't work, in theory she has no income and the student gets maximum loan and FREE tuition even if the 2nd husband is a millionaire. and i know of some of these. they all think it's quite fair.

When I registered my daughter's birth the registrar suggested I invest her child benefit if I didn't need it. I have followed her advice; what I have never had I don't miss. If my daughter decideds against uni she can always use it for a car or towards a house.

Janh, thanks for some excellent and thought-provoking information. It makes me a bit sad really. My cousins, my sister and I were the first people from our families to be able to afford to go to university in the 60s/70s/80s. My father and my uncles were all university material in the 30s and 40s but came from a very hard-up rural working family so were pulled out of school at 14 and apprenticed. It seems if we don't start saving right now for our toddler son he could be in the same boat as they were. Progress, eh.

It's interesting that everybody so far seems to be taking the line that parents are responsible for university fees etc. What about students having a job while they study, as is the norm in the States? or working for a couple of years and then going to uni when they have a bit of money behind them and are au fait with the jobs market etc?

Marina,
Making a contribution to a depressed local economy is a good point - but at my old university, I have to say that I was always slightly uncomfortable with the fact that the students' only interaction with local people was in a privileged dosser/servant relationship! I spent one year working my way through university. I had a full time job during the summer vacation, and worked two evenings a week for the rest of the year. I think it is possible, but I was a bit older than 18 at the time.

marina and sml, this is what we're having to do. number 1 daughter has taken a year out and is working at sainsburys to save enough money to pay 3 years' tuition and something towards her keep; she will not be entitled to the maximum loan but will get around £2800 which will pay for her accommodation, books etc. she will also have to take a part-time job while she's there; she is going to leeds and probably won't be able to continue with sainsburys as we're informed that you really need a car to get there from the student halls.
she is really looking forward to being a student again and using her mind a bit more - that's a bonus!
fortunately, when no. 2 daughter goes, our mortgage will have shrunk considerably and we will have some spare disposable income, but having made minimal pension contributions for the last 5 years i think we'll increase those and make her do the same thing - it's fairer that way anyway!
incidentally, did you know that oxbridge students are NOT ALLOWED to take part-time jobs? how elitist is that???

I like the Australian system whereby there are no fees and so on payable by university students. After graduation, when their earnings reach a certain level, former students then repay a large part of the cost of their education through tax contributions. If your earnings don't breach that threshold, you never have to repay it. I think it is a pretty fair way of doing that as is it gets around the problem of large numbers of affluent middle class students being supported by taxes paid by the less well off.

Also, there is nothing to prevent Oxbridge students working in their holidays, the restriction just applies to term time.

Sml, I take your point about halls cleaners, but where I studied (Sheffield and Birmingham, in the 80s), all sorts of admin and teaching posts right through the university hierarchies were also held by local people.
To be honest, I think it is a shame that students have to work too much while studying as I'm sure it can adversely affect your ability to really engage with your subject. There is such a rat-race, long-working-hours conveyor belt in the UK that we step onto at 16, 18 or 21+ - if we're lucky enough to get a job - and I wish we could change it. I know the cost implications are huge and some people think students have a cushy enough life as it is, but maybe if more people had a relaxed "it doesn't have to be this way" start to their working lives, it would make for a better society for everyone ultimately. I think anyone with the ability to get their A levels should have access to quality HE and the space to carry out their studies without fretting themselves into the ground over money. I probably sound a bit like a sad old hippie but I think my university education, quite a carefree one, made me, and I'd wish the same for any young person today. Sunny afternoon ramble really.

Janh - you posted your description of how you as a family are getting by while I was noodling my way through my posting. I think it's such a shame that these types of worry/consideration get in the way of getting a good education for your daughters. Bells has a point about not subsidising people who can easily and genuinely afford to contribute, but I think there are an increasing number of obstacles for families and students on most income levels other than the seriously rich, to negotiate compared to 20 or 30 years ago. I hope your daughter has a great time at Leeds!

But surely managing the finances should be thought of as part of the education process? How many of our contemporaries took advantage of their free time to immerse themselves in their subject? very few I suspect. The ones I know who did, would have anyway because they were interested in it. Learning is a life long process, you can always (shock! horror!) pick up a book after you have graduated!
I understand why Oxford have made that ruling, I guess it is because the terms are only 8 weeks insstead of 10 like at other unis, so the term is very intense as you try to cram nearly double the syllabus into a shorter term. On the other hand, it leaves a longer vacation for working in, if you are lucky enough to find anything and have the energy left.

but the oxbridge ruling does mean that if your parents can't afford to support you then you can't go. (nb this wasn't an issue for us!!!)

part of the problem currently is that because of the way the university system has been expanded, by both this and the last govt., that there are in some ways too many students in the HE system and it can't cope without extra money - and where is that going to come from? i agree with you, marina, that things were rather too cushy in the days of grants and that possibly today's students, having to make more of a contribution themselves, may appreciate what they are doing and study a bit harder. (or maybe they won't!)

we have 2 younger boys as well as the girls; the youngest is 8. by coincidence, when he was a baby we had a life insurance bloke round and we asked him then about possibly getting insurance policies towards uni - at that time our others were 6, 9 and 12 and tuition had not yet been introduced but was being threatened. his estimate was that we would need a total fund of £100,000!!!!! given the fact that his computer had turned the dates given to it into 4-year courses instead of 3, he was probably quite close as most sources now suggest £5-6000 per year to cover everything. but the premiums required would have stopped us eating...

there was a piece in the guardian on saturday about stakeholder pensions which said that if you put your £15 a week (child benefit) into one JUST from 0-18 and then stop, by the time the child reaches 60 its fund would be worth £250,000. some of you might think that would be a better investment...

thanks for the good wishes, marina! i'm SURE she will!

Sml, but how many do (pick up a book after they graduate?) A lot of the friends I had at uni in the intensive, high-flying subjects like law and medicine never had time thereafter. Most of the people on my modern languages course hardly did while they were there, but that's another story. And of course you're right - I loved my degree subjects, drama and french, still do, and have always been a voracious reader. So, yes, I am going to look at the university process from a rose-tinted angle because I got so much out of it.
I work with students now and while I couldn't agree more that of course they need to take charge of their finances as part of the education process, there is a big difference between holding down 3 part-time jobs and getting no sleep just to pay the rent, and managing a realistic budget responsibly without having to live on potatoes and ready brek for three years. One is useful experience, the other can and does threaten vulnerable young people's physical and mental health. For every 10 shrewd young cookies who get by, there is perhaps one who suffers some kind of avoidable and damaging crisis, entirely down to lack of funds. I feel very strongly that should not be happening.

Janh, I dispute that poor students cant manage oxbridge because they aren't allowed to work. The big difference between oxbridge and other unis is that the university is richer. This means that if you're smart, you can live in halls for 3 years which is MUCH cheaper than taking a ridiculous 12 month lease on an expensive house - even if your college isn't rich. Also, there is lots of temp work in Oxford for the vacations if you do stay, which is not the case in some other university towns.
Marina, I agree with you, and would like to see more meaningful support of undergraduates by the universities, eg spending appeal funds on affordable, secure student lodgings until there are enough of these, instead of pursuing airy fairy schemes like international concert halls.
I spent one year studying arts subjects (pure self indulgence!) and loved the subjects so much that I just studied all the time - that was the year I also had a job. But the the thing that made this possible was that I was living in a university house. The added stress and expense of a private rent would have made things much harder. NB, if you are in IT, the field is changing so fast that you can't afford to stop studying at all!

Janh, I just read what I wrote again, it sounds very confrontational! what I mean is that I hate to see people being put off applying to oxbridge because of some myths about it being financially "elitist", which it is not. I am not saying that Oxford is perfect, far from it, but the changes needed run far deeper than allowing undergraduates to work during full term. Oxford terms are a total of 3 x 8 = 24 weeks during the year, which leaves 28 weeks for earning money. I think the most valuable thing is to be clued up enough to find work during this time, eg invest in some secretarial training during your year off. You don't need to come from a rich background to figure this out. Of course, there is nothing to stop people having jobs during term either if they can cope with it, the chances of the university finding out are minimal after all.

My vote is for a tax to be levied on students after they leave, but for tuition and grants to be available for all. I'm concerned that there are far fewer students going into the arts subjects, as the salaries afterwards do not pay off the loans accrued during the study. I also think that the tax should be lower for those working in the public services eg teaching etc. Given teachers salaries at the moment, I'm not surprised that there is difficulty recruiting people for these careers as the time taken to pay off loans is so much greater than in some of the more lucrative areas. Both my husband and I went to university in the early 80's, and even then it was a struggle to manage on the grants and overdrafts, but in those days, there was very little chance of employment in the holidays as there was massive unemployment generally. I am concerned that if this situation arises again in the future there will not be an option of work for these students, and they will be forced to rely on parental handouts, or not go.

I was at university in the late 80s and early 90s and I followed a thin sandwich course. This meant that I studied for the autumn and winter terms and then for the spring terms we all went off and found work placements. This meant that we spent an extra year at university to catch up on the study we missed. Most people usually worked the full six months until going back to uni in October. Unfortunately, the thin sandwich course has all but died out now, which is such a shame as it was a great way of getting money and work experience (not always hugely course related) while studying.
I also waitressed during the Christmas holidays and had a number of friends who did bar and shop work to boost our incomes.
I think it is definitely possible to work and study. Afterall you get mature students following very demanding courses such as medicine and law and they are often mums and nothing is much harder work than that!

student accommodation could be cheaper too; from what we've seen it seems to cost a minimum of around £60 a week for the 30 weeks most unis require attendance, and some rooms are over £100 a week. even though this includes meals in some cases (not eaten in some cases!), utilities etc., it is still a lot and is obviously a source of extra income for the universities. (and even if oxbridge rooms are cheaper i still can't see the average student earning enough in the 28 weeks they're not there (and they have heavy reading lists for vacations) to pay for the rest of their living expenses for the 24 weeks they are there...)

as the students are having to use their loans and overdrafts to pay for this, and subsequently paying interest, maybe now they are paying towards tuition as well, accommodation costs should be reduced? if this govt. is still so keen on as many people as possible going to a university of some kind then it really should be looking at these things instead of just continuing and increasing charges invented by the previous govt.

i went to a poly from 69-71. my grant was £95 a term the first year, £120 a term the second year; i shared a flat and my rent was £2 a week! i lived adequately on that and i am just reeling at the way things are working now...i agree with debsb that financed, or semi-financed tertiary education with some sort of levy on subsequent earnings would be fairer and easier for most people to cope with.

I agree with Bells, re the Australia university system. There are minimal charges made up front and the rest of the tuition (only a proportion of it really) is paid back later through the tax system (HECS - Higher Education Contribution Scheme). I finished my undergrad studies in 1992, did some postgraduate studies (for which I had a HECS exemption scholarship) started fulltime work making the required salary in 1997 and will probably have finished paying off my HECS debt by 2002! Depending on your income, they tax you at a rate of 1%, 2% or 3%.

chelle - what proportion of students go on to university in australia and what sort of finance does the govt provide? is it means-tested or does everyone get the same amount?
what are the income tax rates in australia? are they higher than here?

it certainly does sound like a much more equitable arrangement.

Janh is right - now that universities are less for the elite and H.E is for everyone, the money in the system is spread more thinly. It's only going to get worse. Whatever schemes are dreamt up in the future, there won't be funding for the so-called middle-income family. I'm not banking on any grants for mine. They are now 8,5 and 3 years old and I'm squirreling away anything I can into my 'university fund'.

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Just to clarify Bloss, the means tested allowance is a payment made to support students while the eventual repayment through taxes means no tuition fees and so on. So the two are separate.