groaning under the weight of private school fees!

[pearso]

Hello,
I've got one child at private school, the other still at state primary for another year and we're dreading the decision next year about what to do. It's very unlikely we'll be able to afford a second set of school fees. Is anyone else in a similar situation? I'd love to hear from you if you are.... I'm also writing about it in my column for the Evening Standard so wouldn't use names but would love to hear what people think, especially in London and about any experiences good or bad.
thanks!

A good point tatt. I think that a good dose of common sense is often better than the 'brightest minds'!

Very true tatt. But not all of the 'brightest minds' want to go or do go. into politics or the city....

You have a point, tatt, but maybe the answer is effectively to have more Oxbridges.

And I am a boffin and therefore pretty clever, but I am not in politics or the City, although frankly I could have gone down either route. I thought both were far too male-dominated and replete with bullies for my liking, and I did not want to be some sort of token woman on the receiving end. So they lost me.

Sorry Tatt, I should have said 'more and diverse Oxbridges'

Oh, and tatt, I spend a lot of time questioning the system, like my colleagues. Academe is where teachers go to do this.

Many teachers I know are constantly questioning the educational system. Good teachers are interested in engaging with young people and inspiring them to want to learn. I'm a teacher and it wouldnt occur to me to want to 'brainwash' anyone. Weird idea.

And agree with boffinmum that very many bright intelligent and capable people are not interested in going into politics or the City.

Which is perhaps a shame, as politics and the City could certainly do with some bright, intelligent and capable people!

Hindsight is the greatest gift, as they say, but of late academics have looked at some of the decisions and processes going on in the City, and asked themselves why on earth this was being allowed to happen. Yet many of us were slapped down for questioning various practices. It was not seen as a legitimate area of enquiry for us.

While we are 'allowed' to debate Government policy within certain confines, it seems that when it comes to commercial and financial practices, it is assumed we are somehow unwordly and ignorant (otherwise we supposedly would be in business ourselves, the argument goes). Therefore our opinions fail to count. This is extraordinarily arrogant on the part of business (and indeed funding bodies).

Many of us understood at a very fundamental level the problems of social engineering via sub prime lending, and many other problems that developed over the last 10 years, and how it all linked to social welfare policies internationally, yet we had no real outlet for expressing our concerns.

Now we are all paying the price.

"it seems that when it comes to commercial and financial practices, it is assumed we are somehow unwordly and ignorant (otherwise we supposedly would be in business ourselves, the argument goes). Therefore our opinions fail to count. This is extraordinarily arrogant on the part of business (and indeed funding bodies)."

I do understand what you are saying Boffin but there is a problem of complexity. The financial products are so complicated that the gamekeepers simply didn't understand a lot of what was going on and couldn't therefore anticipate the range of potential outcomes or safeguard against the worst.

But to blame business and funding bodies (incidentally I don't see what funding bodies have to do with it - which bodies?) is an oversimplification. There are so many components to this credit crunch:

1. The politicians - who didn't even begin to understand the complexities of the banking and capital markets
2. The civil service who still think that business and banking are dirty words
3. The regulators who were too closely linked to the institutions they were supposedly regulating
4. The banks, who could not in fairness do much other than follow the market without going out of business
5. The credit-rating agencies, who were peddling a load of old shite for services
6. US - the great british public. Who borrowed and borrowed and borrowed far beyond our means to repay.

We are all complicit in this and if lessons are to be learned, we all have to accept a share of responsibility.

I think the problem with you '6' Quattro, is that we were told we could.

When I worked in banking in the late 80s, early 90s, the system was just changing from the loans officer to the computer. The loans officer wanted a budget completing and backing up with 3 months payslips and bank statements. The loans officer actually looked at these. Then a credit check was done, pretty much to check for CCJs and bankruptcy

The loans officer/bank manager could take aview when someone had a cheque presentedday before pay day and agree to pay it even though it would take them over their o/d limit, with discretion to charge.

It's all automatic now. It's all sales and target-driven and computer decisions.

I've been horrified since I left to see how it has changed. We re-mortgaged and were told it was ridiculous not to borrow as much as we could - our house had tripled in value and the lender was desperate to lend us much much more than we needed, not bothered about income at all. But obviously concerned about having lent loads - and sold some repayment vehicle and insurance and taken a shedload of commission on the side.

Needless to say we didn't take up this offer and still have a very reasonable mortgage but these institutions have trained salespeople to dangle a big carrot and encourage less financially astute people to have things they could never dream of on their income normally.

It makes me quite cross and I would love to see a return to old-fashioned banking, along with old-fashioned health services, and various other communitiy-related activities. I think community is something that is missing in a lot of people's lives and has led to the higher levels of depression there are now.

Excuse typos - still not used to netbook keyboard.

Apologies to OP since this is moving even further away from the subject

Part of the problem with our society has been the have it today and pay for it tomorrow attitude of many people. This, unfortately, has extended to school fees. Some people who fork out for school fees have not forward planned how they will manage should their circumstances change.

Purchasing the best education for their children has merely become another outward display of consumerism. The problem is when the house of cards falls, it is the children who suffer. They risk being removed from a school which they have probably loved and forced into a more diverse environment which they may not have the social skills to cope with easily.

I am not against private education for those that can afford it. However, I do think that people who put their children through the system need to ensure that they could afford it if they are faced with life's little surprises eg. a year's unemployment or an unplanned pregnancy. The best way to do this is to have substantial savings or investments which can be called on. If your outgoings are too high to save, then stay clear of the independent sector (as I have). Of course, with interest rates so low it seems that saving is for suckers at the moment!

I agree SueW - and I don't think you have moved away from the OP, because I'm shocked at some of the people I know who have re-mortgaged/borrowed huge amounts precisely to pay school fees. And these are quite sane and sensible people! Yet I sometimes wonder if they've ever stopped to think about what the rest of their life will be like. If you borrow tens of thousands of pounds to pay for school, then University, at some point that money has got to be repaid.

I totally agree SueW about the culture that has built up, whereby people have been encouraged to borrow and spend well beyond their means and bury their heads in the sand about what their later life will be like, living in poverty!

I wouldnt say I'm particularly great with money, and I find subjects like mortgages, re-mortgages and pensions deadly dull, but the one thing I'm dead sure of is that I want to be able to afford a comfortable life style right through my life. I think people have been sold a lie. Yes, of course personal responsibility comes into it, but I also agree that people have been manipulated and enticed into spending way beyond their means, and will then be shafted when those loans are called in.

There are two questions though:

Q1 - Would a lender lend? And pragmatically lenders have built in a certain expectation of default into their lending.

Q2 - Would a borrower borrow? And far too many people have borrowed in excess of what they can comfortably afford to repay.

I agree with you Sue when you say that there is a lot of naivety around finance and I truly think that the education system has massive gaps in the curriculum around lifeskills (like managing money).

There is a thread in the same topic where a family is proposing to remortgage to cover the cost of school fees. And that feels horribly financially reckless to me (I am unusually risk averse) but clearly this is what the poster feels she needs to do to give her child a high-quality education.

I would only remortgage to pay for a home improvement. Remortgaging for school fees goes in the same bracket of madness as doing so for a shiny new car or a holiday (IMO).

I think some of the good that may come of this recession will be a reduction in choice.

Remember when only banks did mortgages and they were repayment? When I was staff you weren't allowed anything other than repayment cos the bank wanted its money back!

Then the whole market opened up and supermarkets and high st stores offer finance. Not competitively, which is the theory behind more ocmpetition, but at outrageous APRs, higher than most bank credit cards.

OK, perhaps it wasn't brilliant to only have one phone provider - BT - but is anyone really able to compare like with like when buying mobile phone cotracts or broadband packages or utilities? It does my head in trying to find the cheapest of anything.

Could rant about this for ages. Idid think about going back into banking a couple of years ago - was asked to as former staff - but !!!

I certainly hope one outcome of the recession will be that more people will learn how to live within their means and discover contentment and happiness through simpler things.

I know we all moan about the consumerism in society, but I think it's taken the economic downturn to really bring home to many people how deeply unfulilling so much of society's consumerist behaviour is. It's become a mad chase to find the latest outward display of consumerism - whether it's the newest gadget, the fastest car or the biggest house.

I think school fees are slightly different in that it's probably only a small minority who pay because of snob value - they think it 'must' be better because they are paying. Many people unfortunately feel they have no option because they live in an area with poor choice, and they probably live in that area because of work commitments. I feel very sorry for people in that situation - it can't be very satisfying from a community point of view to live in an area with poor public services. Some people use private schools because their child has a specific need which cannot be catered for in state, so you can see their reasoning too.
But I suspect there are also people who will now rethink the school fees thing, particularly if their kids have got a good few years ahead of them and the parents can't be sure they can sustain payments throughout that time.

These days teaching about finances should be done at school. As soon as they are 18 they are adult and allowed to build up huge debts without understanding the system.
It was much simpler when I was a student, I didn't get much money to handle and I couldn't build up a debt larger than one that I could pay off with a holiday job. You tended not to buy something unless you had the money.
I have always thought that there is a fault in the system. If you get into debt at university you are probably still paying it off when you also want a mortgage and children and finally you have to finance your old age-there just isn't enough money in the pot to do it all, especially if you pay school fees on top of all that.
We had had a long period when each generation is better off than the last, for the first time I don't think that our children can expect this.
I feel very sorry for the students graduating this year-even the brightest are going to struggle to get jobs in the current market.

I agree pisces - and it's a really deep rooted problem, with many different causes.

Madsometimes sums it up:
'Part of the problem with our society has been the have it today and pay for it tomorrow attitude of many people.'

When I was at University, students tended to live within their means. We were perfectly happy to live on lentil stew and baked beans. Having a car was unheard of - you walked or took the bus. I've lost count of the number of 18-22 year old students I know who have a car these days! So culturally things have changed a lot. When I was a student we prided ourselves on putting together cheapo outfits from the charity shops. These days students seem to wear designer gear and it's the poverty stricken 30 and 40 somethings with families who are buying from the charity shops! There have been so many reversals in society. I think I was quite content to live in comparative poverty as a student for a number of reasons. First, only around 8% of young people went on to University then, so I suppose there was more kudos in leaving home and going to live the student life. Secondly, it just seemed to be accepted that in your late teens and early twenties, you would struggle. That was just part of life. I remember it being quite fun when me and DH, newly married, started renting our first house and ate all our meals off the floor because we had no table. And we spent the first summer without a cooker - we ate cold meals and visited every BBQ/village fair etc in the locality to get a burger now and again! But I suppose we were confident that as graduates, we would quickly work our way up and would become better off.

These days, it must be deeply depressing to be graduating, having a shedload of debts and very poor prospects of being better off.

I worry a lot for my kids. Wish there were simple answers.

Very good points made by all, btw. Just want to add that I think it was very dangerous to force feed the idea of student debt to 18-22 year olds by requiring them to apply for a student loan in order to be able to waive parts of the fees they were entitled to have waived anyway. A lot of them have ended up accepting the loan instead of considering other options such as economising, living at home or swapping accommodation in parental homes with other students, and taking up p/t work to minimise debt on graduation.

Some of my better off students come bleating regularly for (non-existent) bursaries, yet look at me as if I have gone totally bonkers when I suggest that they should be pulling their fingers out and doing agency babysitting and helping in holiday and after-school clubs for children to minimise their financial demands on other people (there is really big demand for this type of labour locally). This would help society and add to their CVs at the same time (they are Education students in the main) and also nicely keep the wolf from the door for them.

It seems as though many students are stuck on the debt/handout continuum and have no idea how to generate their own income - they have been infantilised to the point which they have lost touch with reality in some cases.

I know this will get a bit harder for them in years to come, but there is still scope at the moment for them to graft a bit, and I am not sure they have all entirely got this message (although some work their socks off, it has to be said, but they are often the slightly older ones who have seen the light).

In the meantime we are funnelling as much money as we can in bursary terms to student parents, those who have been in care, and retrainers after redundancy, because it seems like a much better investment. These people have high overheads through no fault of their own, already probably do too much paid work outside Uni hours anyway, and are more appreciative of the support anyway.

We should be encouraging self-reliance, not debt.

Totally agree Boffin!

Yes, of course there are some students who work really hard and try to avoid debt, but very many of them just max out on the borrowing rather than doing the type of jobs you suggest.

We often see threads on here from mothers who want to work, bemoaning the lack of childcare during school holidays, yet this is exactly the type of gap that could be plugged by students keen to earn some money and add to their cv. My own kids have some wonderful memories of summer days out with students we employed to look after them. Self-reliance is so much better for everyone.

Jolly good thing then for the profilgate to have their wake up call. It will do them good and the market always moves in cycles anyway.

There are those from academe who advise the City and Government. Labour listen to a number of think tanks. Can't the academics on this thread get in on those types of bodies?

Jolly good thing then for the profilgate to have their wake up call. It will do them good and the market always moves in cycles anyway.

There are those from academe who advise the City and Government. Labour listen to a number of think tanks. Can't the academics on this thread get in on those types of bodies?

I am all for belief in cyclical markets. At the moment, I spend the whole time bleating on about how we all weathered the last recession and lived to see another day, etc.

As acdemics, we do talk to think tanks all the time, and some of us even publish work in conjunction with them, but their research cycle is often a bit too short, in our opinion, with the research done by very young, inexperienced people, which means they sometimes skip through the issues and end up with an outcome that just panders to policy anyway. It's longer than consultancy work (which we do as well) and too short for something really rigorous and original, which means their work can fall between stools.

Just to say that as a recent student and student-welfare-type-person the majority of students don't want to get into debt but don't want to work because:

1. the university's don't tend to be too keen on it - my former university imposed (quite frankly ridiculous) limits on the number of hours students could work in a week. I believe Oxbridge still bans its students from working.

2. you are constantly reminded that you are THERE TO GET A DEGREE - whilst babysitting or holiday childcare is going to help education students, prospective lawyers aren't going to benefit so much. Spending all your free time in the library and doing relevant activities, like mooting or volunteering with the CAB for a lawyer, is going to help you get that pupillage/training contract.

3. some courses just don't have time for a job - medics really cannot work, and in our advice centre we dealt with literally hundreds of medics, dentists and nurses who couldn't fund themselves, couldn't work and didn't want to give up.

4. our advice to students in debt was to first investigate getting a job, second apply for as many bursaries as possible, third apply to charitable foundations and fourth to investigate borrowing. I hated saying it but it was the only way. Sure we gave out leaflets and information about debt repayment, money management and ideas for economising but I doubt that once they got their money they really thought about why they were getting into debt in the first place.

5. you're somehow expected to get into debt.

So - because a degree is now 'necessary', even if you can't really afford it, and because so many people have degrees that you need a really good one, from a good (read expensive) university, the cost of living is high and yes, todays generation are raised expecting to have it all, borrowing is advised. And this attitude is going to carry on throughout their lives.

So because they borrowed to get their education at a university level, what's the betting they'll be borrowing to get their children a private school education because remember, in so many people's minds, good = expensive.

rant over