Spent some of his hall fees already

[Moominmammacat]

I put £2,000 in my son's bank account to pay his hall fees for his first term at uni later this month. Warned him not to touch a penny of it ... he's already spent £600 of it on nothing in particular, meals out, travel, coffee ... what would you do?

They sound good moves. DD3 is going to try and live on £50 a week after Freshers week and she has to pay for food.

Well done that Moomin! It's one thing scaffolding their learning and developing maturity, it's entirely another to be a cash cow being ridden by a layabout.
So hopefully that will be the metaphorical equivalent of a cold bucket of water over him, and he can rethink things.
His learning curve just got a bit steeper.

amumthatcares true that "half of them may never pay it back all off anyway" but they will still be paying 9% of whatever pittance they manage to earn for the next 30 years. That argument only works for me if they earn little enough to never pay anything and it will be a fine life on £21,000 a year.

Moomin I wouldn't completely dismiss student loans as an option. Bear in mind that if he is entitled to any grant at all, this may mean he will also get a bursary from the university, and help with any field trips his course has.

Also, if he is rubbish with money, a student overdraft may seem really tempting to him. He can get one fairly easily with a student bank account. A lot of students view this as "free money", and don't look at the terms of when it has to be payed back. Getting in debt with a bank is much worse than getting in SFE debt.

Also, bear in mind that as you only pay back 9% of what you earn over the threshold, loan repayments are now lower than they were in the past, although obviously you are in debt for longer. I think it is very kind of you to try and stop your son getting in debt, but it might encourage him to be a bit more sensible, if he felt it was "his" money, rather than yours.

£50 a week will be plenty for him to live off, if he is outside London.

What is he spending 50 quid a week on if you are paying for food and a room

There are people trying to feed small families on that much...

There are people spending three times that on a haircut too.
He's going to have transport, course materials, entertainment, clothing...all sorts of bits. DD is managing on £50 a week after rent and course fees.
It's a reasonable amount.

£50 a week sounds massive to me when he doesn't have to buy food or pay any bills. DD1 and DD2 managed comfortably on far less.

Yes, quite agree ... books, I suppose, travel, food at weekends. £25 might do it if we are lucky.

Moomin I would let him take out a loan. I know you don't like the repayments and neither do I. But we found that it helped our DDs learn to budget and although we paid their rent they knew we couldn't afford to give them anymore money.

Let him take out a loan and learn to budget.

TBH 50 quid a week to pay for food, travel, clothes and books doesn't sound like much. Depends what he's studying, I was doing English and spent a fortune on books

He doesn't have to pay for food chubfuddler he's in catered halls.

Lunches and weekend too?

Thing is he's been a bit of a prat and first weeks at university that's not unusual. But the other expenses he's going to have aren't going to go away just because he's got no money to pay for them. He needs to get the loan and have some help budgeting.

Books are a one off cost though, not an ongoing expense. They will cost more than £50. If you are prepared to fund the cost of the books he needs, then buy them yourself (most are available on amazon) and have them posted to him. Otherwise, he can make do with the library.

Obviously he will need some form of note-taking equiptment, but pen and paper is fine and this is obviously not very expensive and not a weekly expense.

Travel- is this refering to him coming home from university? If so, is it reasonable to expect him to use something like megabus- which is much cheaper than trains- to compare, I recently travelled from home to London and back for £15, compared to £70 on the trains. Or is he having to travel whilst at uni? This can get expensive, so it would be worth working out exactly what this will cost him a week.

He will need toiletries, and some cleaning stuff, as well as a small amount of food for weekends. He will also need to pay his phone contract if he has one.

Managing this on £50 a week is very very doable. I know people with lower weekly budgets who are also buying all their own food and some bills in shared houses. This will also give him some money towards socialising, which, whilst not esential, is obviously nice to have.

I would not be giving him any more money as he clearly needs to budget. He can take out a non-assessed loan without your consent if he is really that desperate for extra cash. I have a feeling he may be blowing it all because it is "free money".

The great thing about the loan is that they coincide with the payment days for hall fees!!! No chance to spend it. Why on earth not take out the loan and make life easier all round? this could and should have been avoided. Pay off the loan bit by bit in the future rather than cough up thousands now. Interestingly some posters are way out of date with hall fees. DD2 paying £8600 pa in London and no food included. Bills are though except tv licence.

Thank you for all your helpful responses. Thought you might like to know that by mega-busking DS has clawed back £400 in the past week and has got himself booked for a couple of wedding receptions before he goes off to uni so he should do it ... wouldn't have pulled his finger out had it not come to a head though so lesson learnt.

Regarding student loans, I am still totally anti ... and realise I am lucky enough to be able to be so ... assuming DS keeps busking.

Just Google Merryn Somerset Webb, an ex FT financial journalist, for a more eloquent explanation than I can give ...

"Here we have a charge on graduates taken via the income tax system; that there is no way out of; and that goes up with your income. There are elements of a loan in here but for most people, these kinds of repayments are going to feel more like a tax. And for those who end up paying it for the full 30 years, a pretty high one at that.

From 2015, if you are a graduate and you earn £21,000 you will end up paying a marginal income tax rate of 41%. If you earn over £42,475, you’ll be paying 51%"

If DS takes out the minimum loan + fees, he borrows £51,000 and repays £154,030 over 30 years. Not doing it.

Moomin - you say he's not taking out a loan? Are you sure?

My parents didn't want my DSis to be saddled with debt so paid gave her enough cash for all her expenses. She still took the loans though and spent that too.

Bloody hell moomin how much are you expecting him to earn if you think he'll end up paying back £150k!!!!!

By my very rough figures is he averages £40k salary over 30 years from graduation he'll pay back 9% of £19k, which is about £2k per year, so £60k in total not £150k.

Presumably you've paid his fees too?

I felt the same way initially Moomin and even considered getting a second job to fund DD's living expenses so that she only had to take out the actual course fee loan. Studying for another 3 years for the privilege of a £50,000 debt does not fill me with joy, but having Googled, Googled and Googled some more, the overall opinion was that if they are borrowing the course fee loan, they may as well borrow the maintenance loan too. The amount they borrow doesn't affect the actual weekly/monthly payment they make back when they start to earn over £21,000. Obviously it would be lovely to keep the debt down to a minimum but it would mean a great deal of sacrificing (unless you are in the wonderful position of having plenty of disposable income). Even Martin Lewis on MSE suggested that unless you were wealthy and didn't mind parting with that amount of money, it didn't make sense to make the financial sacrifices of scrimping, scraping and second jobs.

Titchy ... the calculation was done at www.studentfinance.direct.gov.uk/scheme/dgv/pws/repayment-calculator.html using an average starting salary of £25,000

I can afford to pay his fees + accommodation, all I ask is that he earns his living costs, not that I can't pay them but that I think he should be doing it when, as he has proved in the past week, he jolly well can if he bothers to get out of bed.

I don't have any DC remotely near uni age, but we did think about starting saving now to pay the fees. Thenn I read about what is happening with postgraduate grants and loans, and how bloody difficult it now is to get to study for any advanced degrees without self-funding, yet they are becoming more important to have to get jobs.

So, when (I hope) DS gets there, he's on his own for undergrad, but hopefully we'll be able to help a bit if he wants to do more studying. Not that I'm telling him this until he's about 21!

I was extremely fortunate to be old enough have had an undergrad grant with minimal parental contributions, a full grant for Masters and a full grant plus sponsorship for PhD, and I feel so sorry for today's students. They're pretty much stuffed. I would not be where I am today (using my degrees all the time) if I'd not had the grants.

*then (fingers obviously not working today)

Some virtuous parents, friends of DSs, have saved all their child benefit from birth ... and handed it over at 18. I was never so rich as when I did my fully funded PhD and a bit of secretarial work on the side.

Presumably he wouldn't get the full maintenance loan though so wouldn't pay back that much. Even so, using that calculator assumes his salary in year 25 is about £120k a year - easily enough to afford £1k a month!