Tales from the Squeezed Middle

[Xenia]

Article in today's Weekend FT.It does look as if the Durham couple in the article below (see a forthcoming R4 programme mentioned at the end) are being a bit foolish. Their daughter with her Cambridge degree can pay back her student debt during her life. No need to sell their home when they have 2 other children too.

"First Person: Caroline Beck

As told to Rosie Millard
The struggling freelance writer says she ?can see the abyss?

We?d always thought of this house as being our pension. It was derelict when we bought it 14 years ago, we have done everything ourselves; the painting, the flooring, the garden ? But we need that money now. I can?t think of any alternative but to sell.

Roisin, our eldest daughter, has been offered a place at Cambridge university. I can?t bear the thought of her being saddled with huge debts, so we will sell up and live in rented accommodation.

I am a freelance writer, my partner is a wine merchant. Lots of people here in County Durham ? architects, graphic designers, photographers ? are going through the same thing. We all used to be OK. Some of them now have no work. I am still working but I can always see the abyss, my toes are reaching over the edge.

Six years ago both the children played the piano, one went swimming and my eldest daughter had singing lessons. They don?t have any lessons any more. It?s my youngest daughter Eve?s birthday next week. She hasn?t asked us for anything. We won?t give her a party because this week we had three catastrophic bills: the exhaust fell off my car yesterday; our oven blew up at the beginning of the week; and, last month, the lights in the kitchen fused.

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We look at our finances every day to find out where the money is coming from. For the last two weeks of each month we live off a lot of lentils and chickpeas.

I make my own bread because it saves me £10 a week. I make all my own cakes because if the girls take a slice of it to school, they won?t spend £2 on a muffin. So much of my time is devoted to domesticity. And I find that boring.

For six months I have not been out of this jumper. I wash it. I put it on the radiator. And then I wear it the next morning because it?s the warmest thing I possess. We all have one pair of jeans, and we do the same thing. We also save by not having the heating on much.

We used to take really flash holidays. But when we went to Europe last year, we stayed in hostels. We would have breakfast in the morning, then we wouldn?t eat again until the evening.

Recently I had a voucher for £7 off my weekly shop. I gave it to the shop assistant at the till and she told me it was out of date. Although the date on the voucher said it was in date, the scanner was saying it wasn?t. So, I am standing there with my shopping ? my kids are saying ?Oh Mum!? There are people standing behind me, but I don?t care: I want this £7 off, because £7 off is £7 off. I never would have done that eight years ago. I would have thought: ?Oh that is a crazy woman in the supermarket.? I dug my heels in, and, in the end, it got knocked off.

I went to university in the early 1980s when we were told that our generation of young women could have it all. And I did think we could have it all. I thought I could have a career. I thought I could have children. I thought I could have a cleaner and go out occasionally. When I was 21, if somebody had fast-forwarded my life and said ?That?s what you will be doing?, I would have said: ?No, no, no. That?s my mother?s generation, I will not be doing that.?

It won?t bother me not owning a house.

What bothers me is getting us all through the next decade, so we can get our children to a point where they are self-sustaining. Right now that seems a long way off. We are not living in a Victorian novel. We are healthy, we are happy, we are together. But I can?t see an end to it. I don?t know how they are going to ever afford to buy a house. They are going to be living in rented accommodation for the rest of their lives.

At the end of the day it?s a house. It?s a house that we have done up and we love and we have been really happy here. But it is just a house."

?Tales from the Squeezed Middle?, by Rosie Millard, will be broadcast on Radio 4 on Monday May 6.
www.ft.com/cms/s/2/78affbb4-b1e6-11e2-9315-00144feabdc0.html#axzz2SJ60wVvM

£3651 ( just checked) is today's price for where I stayed self catering at university owner by the university. So the £4k loan for maintenance will cover the rent in most places and Oxbridge BUT it does not really cover your travel and food etc which is likely to be £3k a year on top of that. So students work in the summer holidays, get an over draft and if they are from less well off homes get a non returnable grant.

The system where if your parents are badly off even if they give you £3k a year because your father works cash in hand as a taxi driver and others whose parents are loaded by pay the child not a penny get nothing is not very fair. It does mean the poor are actually in a better position in going to university than children with rich but mean parents.

I am happy to debate it but do explain. We are saying the shortfall between the loan and rent/travel costs is about £3k a year and that the state gives that to the poor but not those whose parents earn more. How can that therefore mean the poor can afford to go and other teenagers can?

Let me get this straight. Sob story #1 bought her house (derelict) in 1999 - a full 8 years before the top of the market in Durham. Hazard a guess 100k in 1999. Having paid the mortgage off at rock-bottom rates for 14 years you'd expect the outstanding debt to be around the 50k mark (on a 100% mortgage) - so at reduced interest rates, let's say around 3-400 pounds a month?

On what planet will it be cheaper to rent?

Or, perhaps the family released so much equity out of their home, in fact treating it as a cash machine - that they are now teetering quite close to the edge of negative equity.

2 quid for a muffin? Forgive me, I don't live in the UK and I don't buy such foods, but I'm sure last time I looked in Tesco you could get 6 for a pound.

My sympathy I'm afraid is limited. Rosie Millard is another one who worries more about her floating walnut shelves than how to add up the contents of her trolley!

Xenia I think the minimum maintenance loan for 2013/14 is £3575 and the room deposit to confirm their accommodation £250 approx depending on the university. So sadly the minimum loan won't cover the rent and deposit in most places.

3564 minimum loan for maintenance and the rent I found where I lived at university is 3651. So essentially we are saying the loan covers your rent just about in most places. So children of slightly better off parents only just then have to find their fares and food and clothes/book costs. Surely they can get that on their over draft and from a summer job and life savings even if their parents choose not to pay a penny.

I just do not think it is as bad as people say.

Dolomitesdonkey, I agree. I know our children are facing considerable debt and that it is worrying, but the daftness of the utterances and the solution thought up by the people in the article makes me despair.

I agree the article is daft. However, I do think that the minimum maintenance loan should cover basic living costs. Plus these days it is more difficult for students to get jobs, not impossible my DD has had one for the past 2 years.

xenia your sums are very odd. My dd lives in a cheap student house in Oxford which costs £87 per week not including bills which is £4524 per year not including bills.

Yes I too think it is odd this only gets discussed on mumsnet, though also a reflection of how out of touch the Govt is that they dont even perceive university education funding as an issue which might affect an electorate.

I did just check accommodation at my old university and it was the same as the minimum maintenance loan.

Here is an Oxford college which came up on my quite search juts now about £3k a year.

So we are saying students need to find about perhaps £3k a year over 3 years from parents, savings, over draft, holiday jobs.

If the result is that we return to only 15% of students giong to university, just the brightest of the bright it would be no bad thing and plenty of jobs do not really require degrees.
As the system favours the less well off it is amazing that those are the ones being put off as if they cannot work the internet and use calculators. If they cannot do that I am n ot sure they deserve university places.

I suspect even more common is parents not wanting their children to have big student loans so £9k fees plus £4k = £40k over 3 years will result in your 9% tax. Say they go into a City type job and are on £100k by age 30 that is £9k a year. I think they probably end up paying back at least double what they borrowed as it is compound interest and they are paying that back just as they take on mortgages, weddings, full time childcare costs. You can see why parents would rather the children did not have the loans. If you pay 47% tax/NI plus 9%, nearly 60% of everything you earn is being taken away from you.

It always was expensive to be a student in London. That is one reason I as an outer London student didn't apply to London Colleges, it was much cheaper out of London.

But some Unis do seem to be busy replacing affordable and basic housing with far more expensive and luxurious ones. The Universities argue "students won't accept more basic halls nowadays", but for less rent they might. Of course the first place with all ensuite rooms was Robinson college Cambridge, which we used to describe as the conference centre.

It's also interesting how it is the 20th century Unis which have to demolish and rebuild their libraries; Oxford isn't about to do the same.

If the result is that we return to only 15% of students giong to university, just the brightest of the bright it would be no bad thing and plenty of jobs do not really require degrees

We have a much lower rate of students in HE than many of other developed countries. If we (further) restrict the numbers in the UK going to university, then graduate-entry jobs will be filled by students from overseas. It is a global-market now, and employers want graduates even if previously they would have been happy with lower qualifications.

The problem is not that university education is unaffordable, it is about policy priorities. Other countries invest in education, we currently (for reasons which I do not understand) do not.

The observation that the UCL student body is changing is Interesting. We had already noted that a disproportionate number of the (London) children we knew were staying in London.

The same will probably happen with my son. London is excellent for the subject he wants to study. Other Universities are as well. However as a home student it will probably be easier for him to get a place in London. Less competition from students elsewhere in England.

Obviously it will be cheaper for us. He can live at home and walk to college. However we would like him to experience living away from home and in another town. Equally it can't be good generally for London kids to stay in London and for the rest to stay well away.

DS is less bothered than we are. He likes living in London and can be confident a number of school friends will stay as well. To his generation University seems to be less about the experience and getting away from home.

Plus Londoners at Oxford and presumably elsewhere are notorious for returing at weekends......

I heard the programme this morning. If I heard right, the DD1 has Cambridge as her CF and UCL as CI. They were saying that they would need to sell the house if DD1 went to UCL.

It is not good that we are going to end up with an ever bigger London v. The Rest of The Country split; London is already too insular.

I am sure that is not so. Could they not have their other children share their bed room or use the bed room of the student and rent out her room to pay her something whilst she is away? I think they are just scaremongering.

mummytime sorry to contradict but Magdalen is doing exactly that (the library thing). The plague pit uncovered during excavations for the new library has only just, after several months, been covered up. They found old wigs from a barber's shop there too. And they had to identify whether or not any skeletons were Jewish because that had an impact on whether or not they could be moved. It's fascinating actually.

I did mean the Bodelian, actually. And obviously Magdalen's must have been pretty modern, because my old college one is about 400 years old.

Bloody bonkers. They clearly have no idea of the student loan system, and their children will probably be much better off in the long term inheriting the house (assuming no protracted care home stays, obviously) than having no student debt.

I get the distinct impression that they have always had quite a nice lifestyle, and there is no mention of redundancy / work drying up. So, if we assume that their income has no dropped substantially (and this is borne out by the lack of mention of any grants or bursaries, though they may just be that clueless) then by making the sort of cost savings that the rest of us do (holidays in hostels / no holidays at all, turning down the heating etc.) then they could quite easily make up the difference between the c. £4000 minimum loan and the c. £7500 you need to live off.

But then again, some people have no idea really - my (very well paid) landlord referred not long ago to a household income of £25,000 being a "pittance". I struggled to keep a straight face.

xenia the only person saying students need to find 3k a year is you.
I would say more like £5k a year and more for London.

Also, university cost rises do not equate with brighter people going. Fees equate with wealth, not brains. The wealthy are not necessarily the most brainy. The concept of money=brain is a fallacy of this bling obsessed century.
More scholarships need to be created at the top universities which genuinely cover maintenance costs rather than a nod to books and stationary.
Magdalene college Oxford is a wonderful place. I was there at a classical dance concert the other day and the auditorium was superb, with John Piper tapestries all round the foyer.

It's way, way older than that mummytime. And to add to your reply, the Bodleian is currently having a shiny new £78m extension built.

I'm not quite sure what your library point is about in any event, but it doesn't seem especially valid :)

It was similar in my day - full grants but not if your parents had a certain amount of money. My parents chose to make up the money to the full grant but plenty of parents did not which caused huge problems in the early 80s for children of less generous parents.

I think we are saying the suggestion is students need £7500 for rent and food etc. The rent seems to be about £3500 in many places. What they spend on travel and the like varies and some spend more than others. Just because all your peers may think certainly luxuries are necessities does not mean you need to have the same views. There are a lot of spoilt children out there and one of the best things children can get out of university is poverty and having to make do and walk not take the bus.