Should to pay your child's course fees?

[MollyHuaCha]

Just that really. Students now start repaying their loan once they earn more than £25k per year.

If you can afford to fund your child's course fees and living expenses in order for them to avoid taking out a student loan, should you do it?

Any thoughts...???

And while having my swim this morning I realised that the Student Loan situation is even more regressive than my initial thoughts.

Rich kids on graduation will be paid 9% more for the same job than poor kids

Talk about a way to encourage inequality and damage social mobility

So how do you all feel that Scottish government pays the students fees there?

The Scottish Government has trashed sixth form education to allow that policy
and the overall Scottish budget is la la land based on tapping England for cash

There are no easy solutions

The "least wrong" solution is a massive contraction in the University sector (down to about 20% of students) and much more money pumped into the FE colleges

The "politically acceptable" solution is to reduce the interest rate to the Government's cost of borrowing, and index link the threshold.

The best solution would be to make courses in areas with strategic critical shortages (eg nursing, medicine and the like) totally free

The long term solution would be to link the money that Universities get to the repayments coming in from students
so courses that result in little or no repayment (with caveat above) would be dropped by Unis.
The earnings need never be related to the degree, just that the degree needs to result in decent earnings.

I'll get back under my accountancy rock now

The long term solution would be to link the money that Universities get to the repayments coming in from students
so courses that result in little or no repayment (with caveat above) would be dropped by Unis.

Which woudl kill of all the Arts, Drama and Music conservatoires....

titchy
Fair point.
An adjustment would be needed for very specialist courses with sky high entry requirements.

The courses I'm gunning for are "media studies" and "art appreciation" and "yacht management" and "tourism promotion" and "business administration" and "music production technology"
none of which should be funded to the tune of £50k by the taxpayer.

It's not uncommon for my students to convert and become lawyers.

Do I get a pay rise?

geta
Which is why I would never link the earnings to the degree subject
I did not study Accountancy after all

Degrees should be about "adding value" to the individual
academically, socially, personally, financially
if they do not, they are a waste of time

Definitely Carl!

Confirmation now out that the threshold for repayments and the higher rate of interest being increased here:

JoJo

Cool.

What are the rates though?
as 6.1% is higher than commercial - and the UK Government is offering other loans at less than 3% over 30 years ....

Also I bloody love the word prink.

It brings to mind Lumpy and Bendy having Pimms in comedy trousers.

Rates here:

SLC

They start at 3.1% post graduation, if your salary is low. Then it's tapered with 6.1% is applied to £41k+ (index linked) earners only.

So it's not actually as bad as most people the press make out.

But its 6.1% when you are in no position to do anything about repaying it still studying

And is it right that a doctor with parents rich enough to have paid for everything earns 9% more than a doctor who took out loans?

It’s 6.1% (RPI plus 3%) during the period of the course though, and then a sliding scale on graduation, ie:

£26k = RPI + 0.75%
£29k = RPI + 1.2%
£34k = RPI + 1.95%

Oh I agree charging 6.1% whilst studying is outrageous! I was just pointing out that the interest rate isn't a flat 6.1% as this is what most people seem to think.

Or even is it right that a mumsnetter with say savings chooses not to pay for a child's fees whereas I paid £34k last week for the twins. Yes that gives them the extra 9% on the earnings subject to the loan repayments if they ever get jobs but I am the one disadvantaging myself when other parents are spending their money on shoes and cars - those who could dredge up £9250 fees (and obviously some parents could not raise that kind of sum). Or we could say is it fair some people might go into some careers now without a degree - there are young apprentices starting in law (my area ) now without degrees under new routes to entry - they will benefit from not having the 9% graduate tax.

By the way the 6% is not particularly unfair. The interest rate on unsecured post graduate loans reflecting the risks there are with them of repayment is 9%. When Boris Becker needed an emergency loan he paid 25%. It all depends on the risk what is a fair rate.

Oldie
My problem with the 6% rate is that the Government could choose to burden kids with less - I see them lending at half that on 30 year basis

And yes, the supremely wealthy have all the options
but the nature of Student loans results in parental wealth directly impacting on take home pay
which in areas with a shortage of UK born recruits is barking

I expected to learn things on this thread, but I didn’t expect ‘prinks’ to be one of them.

So interesting to get so many different views on the original question (apologies again for the typo in the title).

In our family the DCs WILL be taking student loans. Though I do feel a little sad that they’ll be probably paying back the loan and interest over 30 years... seems like a long time.

I am currently repaying mine at the very minimum rate (which is what they offer you - you have to actively get in touch with them to pay more). I'm on a pretty good salary but nothing crazy. I pay less than £100 a month which goes straight out of my pay check like tax/NI so I just got used to my monthly salary without it. I don't even notice it.

My parents offered to pay it upfront and I declined, since I knew it wouldn't actually make me much better off. Instead they are putting money in a help-to-buy ISA so I can buy a house instead - which, believe me, I wouldn't be able to do with the extra £100 a month!!!

for most people the financially sensible decision is not to pay fees but to save for a house deposit. However life is not just about money and like some of the other posters I have an aversion to my child wasting money. The current scheme encourages young people to be wasteful and extravagant - no point in trying to keep your debt low when you'll still be paying 9% of salary for 30 years. So yes students do have fancy tvs (although not many) or waste money on expensive coffees and drinking themselves stupid.

Needmoresleep your child will find their "tribe" eventually. There is a heavy drinking culture at universities but there are also those who dont drink at all or only drink in moderation. So if she wants to avoid excess it will be possible. However you may find she gets corrupted as I think there are fewer non-drinkers and light drinkers at the end of university than at the start.

It surprises me that so little is said about interest rates - if these were reduced students would be able to pay off debts and the taxpayer might actually get the same amount of money back. However students would not have the same mountain of "unpaid debt" left at the end of 30 years. I cant help feeling that the purpose of the current system is not just to impose a 30 year tax (a tax that will not be paid by the majority of graduates for many years) but to turn our young people into extravagant spenders.

already, I feel a bit like I did about Blair giving tax credits to people with chidlren earning up to £60k. It is as if the state wants people to be on the hook, controllable and controlled by Big State, all of us vassals, dependent rather than self sufficient and free of the shackles of debt etc. So whilst I can see financially it was silly to fund my child 3 (who currently earns under the ceiling although I still hope over his life he will earn more) despite even his position I am very very pleased I funded him.

There are only certain things I will pay for adult children. Education is one (within reason - I am not funding endless pointless masters courses) and housing (i.e. investment in a home you live in which gives you some financial security) is another. There is not much else I would fund. I would let them live in my house and feed them in cases of dire need of course at any time. I would not put up funds to invest in their business nor help with purchase of a second property nor pay school fees or fund them so they could be a stay at home parent nor provide regular day time childcare (I work full time so that is not an option anyway).

With a house they could sell it and use the money for cocaine in due course. With an education they can never lose that - it is with them for life. So I suppose I marginally would prioritise education over housing.

already
The current scheme encourages young people to be wasteful and extravagant - no point in trying to keep your debt low when you'll still be paying 9% of salary for 30 years. So yes students do have fancy tvs (although not many) or waste money on expensive coffees and drinking themselves stupid.
Do you have the slightest evidence for that ?

Just that DD and all of her friends regard it as a challenge to have as much money left over as possible at the end of every term so that they do not need to lean on parents / be able to pay off a chunk of the debt early.
They are pathologically tightfisted proud mummy alert as they understand the nature of the 9% graduate tax

With a house they could sell it and use the money for cocaine in due course.

That's a very dim view you have of your children!

"Do you have the slightest evidence for that ?" Yes.

Maybe your child and friends dont understand the nature of the graduate tax and that saying a few pennies and paying off a bit early really isnt going to have much effect unless the bank of mum and dad is paying off a lot more. www.ft.com/content/3fc14332-60c7-11e7-8814-0ac7eb84e5f1

Young people can get an education without parental help, getting on the housing ladder in London would take many years without parental help.

already
My daughter was brought up with DCF calculations.
Where did I say pennies

Young people can get an education without parental help
Well yeah - because Students can get loans without parental input
but without loans it is not possible for other than the ultra rich to go to University

getting on the housing ladder in London would take many years without parental help
Bearing in mind that the vast bulk of the country is in no position to give such help, the London Property market will eat itself
especially if the current government manage to negotiate a hard brexit

The trouble is that loans are often not enough to cover accommodation let alone living expenses.

And it's tough for students to make up the difference. Get a job people say but how many term time jobs are there in any university town, that coincidentally fits in with lectures?

And of course there's the issue of late loan payment. And of deposits.

Who helps a student in those circumstances if not Mum and Dad?