Saving for university ?

[HoopyFroodDude]

Are you saving for your children to go to university ? If so do you mind me asking how much?

I have not planned for this but have been inspired by another thread about university debt to start. Do you have any tips ?

My parents saved for me, but I was never allowed the pass books until I was about 25 and I wanted to buy a house. I knew it was there, but I also knew it wasn't to fund my shoe-habit, or for squandering on nights out... my DCs will be told the same!

My FIL has put some in trust for DD (bare trust so it is hers at 18). We haven't told her about it but just have to hope she will be sensible enough to use it for her future (whether that's uni or a house or whatever) rather than blowing it on a trip to the moon Channel Islands. I suppose that's why I feel bad about cashing in the endowment - at least we had control of that and could have said 'you shall spend it on uni'...

DD gets her money when she's 21, and I have no say in what she does with it, which is why I may not tell her it's there.
If she goes to Uni, I'd like her to also get a job, and learn to be sensible, rather than maxing out loans and credit cards knowing she can pay it off when she leaves.

We have money/investments set aside for education etc. I too am sure that tution fees will soon lose their cap so the amounts needed will be high.
I would like DC to begin their working life debt free.
However, I will not be handing over money to waste. They will have fees paid and be given a finite sum of money to live on. They will be expected to work in the holidays - even if voluntary.

That said, even if I hadn't been able to do what I have, I'd still squirel away what I could. Every bit will help.

My two are still very young so no idea whether they'll be capable of going to university - or want to. However, if they do go, I hate the idea that they risk starting their adult lives burdened with tens of thousands of pounds of debt when their parents did not.

So, yes, we are saving: they each have a high interest children's saving account into which goes their child benefit and any cash gifts from relatives, and they also have a children's share investment plan, which is currently geared towards medium risk investments but will change focus onto lower risk ones as they get older. We are very lucky to be able to do this, I know - although it doesn't mean that they won't be expected, encouraged (and perhaps need) to get some kind of part-time work in the holidays if they do go onto HE.

It's money we've allocated to help them, not to give them. I don't think we'll keep it a secret, but they won't be getting it to squander away on a shoe/drug/alcohol habit. We see it as being used to start up a business, buy a house, a car, pay for Uni fees etc but they'll still have to convince us that it won't be wasted.

I think that the approaches to funding uni fees vary hugely depending on the subject. My parents didn't contribute anything like 25k to me, my brother and my sister. I would estimate a total contribution of less than 10k to each of us. We all did long degrees (I am a barrister and both siblings are medics), so it was an expensive process, but because we all knew we were doing degrees which were ultimately going to lead to reasonably well paid jobs there was no great fear about taking out loans. I still owe 15k of student loans, despite having graduated in 2003, but am not worried about it - I will be able to pay it all back, its just that other things keep getting in the way (e.g. new house, holidays etc!!). If your kids are going to do a degree that leads to a good job, then having a student loan is no problem and you don't need to cripple yourself financially saving 25k per child in the meantime. There is a very serious issue about funding by parents (and the state), of degrees which don't actually lead to a job, and therefore the ability to pay back the cost. I have so many friends with good degrees in art history, english, politics, international relations etc from good universities who can't get a decent job anywhere, and are still earning diddly squat and up to their neck in student debt 5+ years after finishing at uni. If their parents had been able to pay for the whole lot, at least they wouldn't be in so much debt, although they would still be unemployable!

this is interesting dh and i have never discussed this (heads in sand) am worried uni is just a rite of passage , like backpacking round innnndia. my old job was advertised as uni grad only and i didn;t go. also suffered from uni hr types at interviews wanting to know why i hadn't gone to uni, like i was in prison instead or something -too old, love, for it to be what everyone did after school, and parents would have wondered why if was going to end up applying for secretarial jobs LIKE THIS ONE. and stop asking for my o level exam results original copies,it was nearly 20 years ago and a bit irrelevant now, don;t you think. oh no. hr policy.

looking forward to adding to dh stress with this later

Since DS was born we have been able to save all the child benefit. Also save an extra £10 per week in the same fund. I really do believe in a little makes a big difference. £10 per week equals approx &10,000 by the age of 20.

My parents were not in a position to fund my degree and I never expected them to. I worked as well and expect my ds to do the same. I do worry that he will see our help as his entitlement.

Forgot to say. I have no intention of telling Ds we have money saved for him. Who knows what will happen - he may be better off with a lump sum later on in life.

This year's tuition fees are a bit over £3K, & max loan around £5K (more in London) which = £128 per termtime week.

If parental income is quite low then some of the loan is replaced with grant which doesn't have to be repaid, but worst case scenario (atm) is £24K of debt after 3 years plus however much overdraft they manage to accumulate (usually the max!)

Student accommodation eats up a large amount of the loan so unless parents can afford to sub they will really need to find a part-time job if they want to eat as well

Projected tuition could hit 5 figures before long if the Condems have their way...

im spending over £500 a month on childcare for ds2 now, so cant afford to save for ds1 to go to uni in 6 years time. he wants to go so i will try to help him as much as i can and dont want to discourage him. both boys have a £1000 each in a bond from my grandad so that will go towards uni if they do end up going. will think about saving their child benefit once i have no more nursery fees to pay out from next year.

No. I do not expect my parents to pay for my adult education when I am old enough and more than capable of supporting myself, and I hope to raise DS to take the same responsabilty for himself when he is an adult.

We couldn't afford it even if we wanted to.

We had DS when we were 17 and we support ourselves, and both had the opportunity to go to uni. We have not asked our parents for money, ever.

I come from a single-parent family, with very little money and zero emmphasis put on education, but the opportunities I have for further education come from the time and work I have put in, not money.

I feel it will help DS a lot more if I invest my time and attention into helping him achieve his potential at school, and building his confidence so he can go out and get what he wants for himself.

If you can't afford to save for university once the time approaches then I would make that clear to your DCs so that they can choose somewhere local, save from part time jobs in holidays/weekends and choose a course that has good employment prospects and minimum costs. No reason they can't self fund, just need to be realistic on where and what to study, which I wasn't.

I was crippled by self-funding university. I was quite literally starving most of the time, dropped from a size 14-16 to a size 10 in the first year and was evicted in my second year despite getting full loan and hardship fund. I came very close to giving up. Had absolutely no family support, not even someone nearby to cook me a meal occasionally which didn't help. I worked all the hours I could but it still wasn't enough to cover housing expenses, travel and paper/pens. I know it did me good in the long run as I have a degree and have better earning potential as result but I'm not prepared to put my children through such a horrendously tough experience.

I'm saving £75 a month per child at the moment and will try to up that once we stop paying for nursery and I pick up more work. They are 18mo and 3.6yo at the moment so that won't be enough with current interest rates but is a start. I can't really afford to save what we do but it is important to me because of my own experience.

At the moment my income is too low to save anything for the future but once both children are at school and I'm not paying my wage to the nursery then I'll be able to save for uni. It frightens me though just what will be expected of parents in 18 years time - and if a university education will be out of reach to many?

isnt that what the kids fund is all about?

i mean, that the money that the government and we are putting into that for our kids, we expect them to use on university tuition and living costs. and yes, we do expect them to go to university.

For those of you with DCs about to start I would also choose accommodation carefully - if your DCs are on a tight budget then the cheapest accommodation will save them valuable pennies, but it will also separate them from students who can afford to splash out on more expensive halls so they won't get sucked into keeping up with the Jones' which is something I see too often with undergraduates. That goes horribly against my socialist heart but they are far more likely to be sensible with money if surrounded by other students who are also needing to be sensible with money.

(Make sure you factor in travel too when choosing halls)

i too virtually starved at university in late 80's would rather freeze to death and walk through a blizzard than refrain from drinking

character building

It was character building but I do think parents need to be honest and realistic with their children. I also think teachers need to be realistic. I came from a single parent family, no income other than our part time jobs and had a then incapacitated mother yet was encouraged (because I got good exam results) to apply for the best universities in the country. It was crazy. I could have gone to the local uni, continued to care for my family and work and a whole lot of shite wouldn't have hit the fan. But then I wouldn't have met my DH and wouldn't be here so

@abouteve since when do 5th year medical students get paid? are you sure?

I know nursing/ midwifery/ other health profession students get bursaries, but medical students never have. that, and the lack of holidays, and evening work, is why medical students tend to graduate with such high levels of debt.

my dp did a 5 year course and ran up huge debts

sadly - he trapped me in his final year and i gave birth three weeks after he graduated so he was never deemed to be rich

It would not surprise me at all to see a "split" in the UK University system in the next decade whereby some Unis decide to become private and therefore independent of state funding/ control. Then they will charge what they like, similar to the top US universities, have independent entrance exams and more rigourous interview processes. It will be a sad day, and disasterous for lower income applicants but I think it will happen.

On another note, the scholarships available in the US are at least partially due to the phenomenon of alumni gifting which doesnt exist here. >70% Ivy league US graduates make a monthly donation to their Alma Mater from 5 yrs from when they graduate. Many make larger bequests in their wills or when they get minted/ get elected to the Senate etc.