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Higher education

Talk to other parents whose children are preparing for university on our Higher Education forum.

Original poster

Parents funding all uni fees

132 replies

ImagoLuna · 07/03/2018 13:44

Can those of you who have funded/intend to fund your DCs through uni, so they don't need to take out loans, tell me if you have any regrets in this decision? What's the range of total annual costs (cheapest to most expensive) for students - tuition fees/accommodation and maintenance for different unis? How did you manage this financially?

I have friends telling me I'm stupid even to think about this and that DCs should take out student loans which they'll 'never have to pay back' - but given our DCs presumably aspire to earnings above the limit to pay back loans, surely many of them will be paying back loans for many years to come?

I'd rather my DCs leave uni debt free but this will have a significant impact on my own life and my future finances too. A price worth paying - or an unnecessary burden?

OP posts:
scaryteacher · 09/03/2018 17:27

Depends doesn't it? I keep getting told that all sorts of rules and regs have been changed retrospectively from having to have gold standard wiring in a house at all times (impossible as every house would have to be rewired each times the regs are updated) to HMRC deciding retrospectively that schemes that were legal for tax avoidance now aren't. Things can be changed by SI, it doesn't have to go through parliament.

I don't trust any govt of any stripe not to change the regs or the terms and conditions of these loans, retrospectively or not.

GardenGeek · 09/03/2018 17:30

This reply has been deleted

Message withdrawn at poster's request.

titchy · 09/03/2018 17:40

The only SI is max fee up to rate inflation and loan amount. Both of which have just been laid.

scaryteacher · 09/03/2018 17:41

Backforgood Bankrolling deposits means gifting the money, so it subject to IHT rules, and, given the age at which people buy now in some parts of the country, it could be seen as voluntary diminution of income for care purposes by the parents. LAs now go back years for this.

Paying for university means there is no IHT liability on the money as it is exempt from that, neither is it seen as a gift.

It also doesn't come down to the bottom financial line either - we didn't want ds to come out of uni saddled with debt, so we paid - our choice. I think the rules may change and that the debt won't be written off til much later, say at the age at which you get your state pension, and for me that keeps getting further away every couple of years.

scaryteacher · 09/03/2018 17:44

I seem to remember lots of stuff in the LGFA 1992 being altered by SI when it initially needed to be altered in other ways. No legislation has yet been so tightly written that an adept civil servant can't find a way through it or round it.

BlueMosaic · 09/03/2018 18:16

Interesting discussion. Can anyone confirm - if you take out loans for tuition fees AND maintenance, do they end up as one single debt? If so, once you have taken out any loan, you may as well take all that you are entitled to as the loan repayments will be the same. Is that correct?

Another question - how much are maintenance loans - does the amount vary across the UK?

titchy · 09/03/2018 18:20

Future SIs can of course be changed - subject to parliament approval. Past ones can't change though, and the 19/20 SI is past. Or about to be. 20/21 will almost certainly be some changes - interest rates I'd bet.

TalkinPeace · 09/03/2018 18:25

My kids will both take out their full entitlement of loans.

DD will probably never ever repay hers because of her career plans
DS will probably pay much of his

The money I'm not giving them now will pay the deposits on houses when they are ready

scaryteacher · 09/03/2018 18:32

Blue The maintenance loans are contingent upon parental income, so the more your parents earn, the less you get.

The variation I am aware of is In England, with inside and outside London loans.

Titchy It's the interest that gets me - cheaper to stick it on the mortgage really.

TalkinPeace · 09/03/2018 18:43

cheaper to stick it on the mortgage really
if you still have one Wink

extinctspecies · 09/03/2018 19:00

cheaper to stick it on the mortgage

Only if you are very confident your DC will end up having to repay the full loans.

extinctspecies · 09/03/2018 19:02

Also that the base rate won't rise hugely over the next 30 years.

FakeMews · 09/03/2018 19:04

if you take out loans for tuition fees AND maintenance, do they end up as one single debt? If so, once you have taken out any loan, you may as well take all that you are entitled to as the loan repayments will be the same. Is that correct?
Exactly.

The maintenance loan ranges from a minimum of £3928 to £8430 (more in London) depending on parental income. It's often barely enough to cover hall fees / rent. Parents are expected (but not told) to top up the loan to the maximum level though many don't. Among my DC friends the ones struggling the most were often those with wealthier parents who got a reduced loan but not much from parents.

TalkinPeace · 09/03/2018 19:05

Base rate is going nowhere in a hurry : government lending rates show that
but yes, I do not see the point in subsidising the stupidity of Government policy out of my pocket

extinctspecies · 09/03/2018 19:10

The base rate is expected to start rising soon. Mortgages & loans are both long-term debt. The student loan gets written off after 30 years. If you go down the mortgage route to be better off you'd need to be sure your interest rate on the mortgage wouldn't exceed the student loan rate over the terms of both.

It's still a risk, albeit a small one.

TalkinPeace · 09/03/2018 19:15

The base rate is expected to start rising soon
But not by much at all .... it will stay below 2% for years and years to come based on my mildly obsessive reading of DMO rates

extinctspecies · 09/03/2018 19:16

Can you be sure over 30 years though TP?

I can remember back when it was 15%! Less than 30 years ago ...

TalkinPeace · 09/03/2018 19:19

extinct
I remember those rates too
and yes, I'm sure
the DMO are offering fixed rate loans over 30 years at 2.89%
they are required by law to make a profit on every loan ....

TalkinPeace · 09/03/2018 19:20

Proof here BTW
www.dmo.gov.uk/data/pdfdatareport?reportCode=D9A.1

Daisymay2 · 09/03/2018 19:30

Our DC took out loans for fees (3K/annum for one 9K/annum for the other) but we paid rent and living expenses. DC2 is doing a Masters and we paid the fees for that- as we did not like the idea of the 2 loans being paid concurrently. Fees were discounted as he stayed at the same University.
Rent has been consistent over the last 7 years- £70-80/week (DC1 was at Uni in the South in a higher cost area) DS2 in the North in a cheaper area. DC2 s house this year opted to have the bills included and this is £15 per week each. Over the last couple of weeks have been grateful as they were not worried about having the heating on.
We have given them about £250 pcm in term time but this has included cost of field trips and fares home. ( As bills are included in the rent this year DC2 gets £200 per month). In the holidays it went down to £100 if not working or zero if working.

Needmoresleep · 09/03/2018 19:39

Is it London that gives me a different perspective:

  1. I expect both DC to earn more than £28,000pa. Most people do. (Plumbers at our local firm can earn in excess of £200,000.)
  1. If they want to buy in London they will need to borrowing as much as they can on top of a deposit. No SL ought to improve their borrowing capacity.
  1. Having grown up in an international city their horizons are broad, and it is quite possible they won’t remain in the UK. Having no loan will make life simpler.
TalkinPeace · 09/03/2018 19:43

needmoresleep
I expect both DC to earn more than £28,000pa. Most people do
But the median wage in London is £24000 (ie half of workers earn less than that)

Having grown up in an international city their horizons are broad, and it is quite possible they won’t remain in the UK
Really? Care workers and nurses and nursery assistants look at moving abroad ?

You need to judge London not by your social circle but by the totality of the city

Needmoresleep · 09/03/2018 20:38

TiP, surely we are talking about graduate salaries. The average graduates should presumably expect to earn more than the median wage.

In London at least, degrees are not needed to become care workers or nursery assistants.

London is a big place so it is difficult to generalise, but certainly in Zone 1 where I live, living costs are high. Any deductions then can have a disproportionate effect on both standard of living and the ability to buy or rent decent accomodaton.

And as an aside, I wish you would drop the snide comments. You have no idea who is in my social circle. Just because you disagree with me, does not mean you shut me down.

Abra1de · 09/03/2018 20:42

I don’t think many graduates would be needing to go to university in order to become care workers? Is it a graduate job? And that’s no disrespect at all to careers.

TalkinPeace · 09/03/2018 20:44

In London at least, degrees are not needed to become care workers or nursery assistants.
Have you looked at the job ads ?

Seriously - you quoted a plumber earning £300 k
do you think - even for a moment - that is normal ?
£75k yes .... but they do it by commuting from down here

And as an aside, I wish you would drop the snide comments.
I do not mean to be snide, but your view of degrees is very blinkered to the AAA intake
but most degrees are not - they are B B C (even in London)
so will never generate jobs that will repay the loans

the fact that more and more jobs have come under the umbrella of degrees is BARKING