Student Loan advice

[econadv]

DS is due to start his Law degree at Oxford in October. We live in Wales where the student loan system is different. He can borrow up to £8,000 a year. He gets £1,000 a year from the welsh govt. We will fund his food and rent, but any nights out, clothes, hols etc he can fund himself through any work he can get. He will be taking a loan for all fees.

Should he live very frugally and take no loan to reduce debt?

Or, take the loan, not be skint but save £7/8k a year into savings just incase he decides to do a masters and use the money to self fund that? Or use it as a flat deposit?

If you're helping to fund him and you're high earners, are you sure he's eligible for that much funding? Has that been confirmed by SFW in regard to your income?

A masters tuition can be funded by SFW too (without maintenance loans etc) but that's three years off yet. The LLB is hard enough work as it is for now.

Yes, all confirmed with SFW. The loan is not means based, but they do offer a bigger grant for lower earners.

The problem is that a postgrad loan takes a further and separate 6% of income, after the 9% for undergrad loans. So if he took a lesser amount for undergrad but then post grad he’d still end up paying 15% of his salary (over £25k ofc)

I believe that Oxford discourages part time work during term time, and working through the Christmas and Easter holidays. Summer jobs are OK though.

Bit confused. So he is taking the £9k loan for fees.

Are you therefore asking whether he should borrow a further £8k for general living expenses, even though your are separately funding his rent and food. He won't need anything like that much. DD had £500 per month from us, plus her termly loan of £1.3K. So about £10k per year, but that covered all food, rent, going out, holidays etc etc etc. PP is right in that there is no time for work during terms or breaks, other than summer holidays.

If he can save it (or you save it for him) then yes, he'd pay back a smaller percentage of the loan for tuition and it would cover both undergrad and postgrad which makes a lot of sense.

But as other posters have said, work is highly discouraged and so if he could save perhaps £5k and use the rest for living frugally on top of the money you're providing he would be in a better position while also saving.

But he will need to get a very well paid job to pay back much at all. He may well do this but I’d take the loan and save your money for a house deposit. If he earns shed loads, he can pay off the loan when he can forecast earnings. Living frugally sounds ultra miserable!