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Higher education

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

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Original poster

Is it true that it's never worth paying uni fees up front?

121 replies

SummeryNights · 29/01/2020 09:09

DD who is just turning 18 inherited some money which she doesn't have full control of until she turns 21. She wants to fund her university fees with it, and part of her livings costs, so that she won't have to take out any loans.
She has a meeting with investment professional trustee very soon. At last chat he advised not to do so, as if she doesn't end up earning a good salary for a significant amount of years, such as by becoming a SAHM, she would never have to pay the loans back anyway. She felt undermined by this (and thought it was sexist) and pushed back; he said to discuss it once she has university offers (she does now) and a career plan for after graduation (not specifically, apart from that she wants a fulfilling one and always to work hard, as she does now). Ultimately she could pay off the loan in her 3rd year when she turns 21, but that will cost her thousands of pounds in interest payments.

My instinct is that ultimately it's her money and her reasoning is sensible, so to back her up. But the trustee said it's never worth paying uni fees up front and all home students take the loan. ("Even the children of millionaires.") DD's research leads her to think this isn't true, but I can't find much information on that. Any ideas, anyone?

OP posts:

Xenia · 31/01/2020 21:18

Yes, people should not confuse the old and new loans. The new ones are £9250 fees rather than the £1k fees my daughters paid (plus in all cases maintenance loans).

For those parents who are used to paying school fees quie a lot just carry on as I have done ensuring there are no loans and then in addition can help with a lump sum towards a property so it is not an either or thing. For those for whom it is that is a personal decision for that family and based on likely future earnings and that kind of thing.

Bluedogyellowcat · 31/01/2020 21:50

My late husband felt very strongly about not paying fees. This obviously doesn’t apply to your situation but he was passionate in his belief that our children should pay their own fees. He felt that it put the onus on them to invest in their own future. He was happy to pay living expenses but was absolutely resolute in his belief that it was the children investing in their own future. We could have easily covered fees and I still can but I’ll be respecting his view

Original poster

SummeryNights · 31/01/2020 22:20

A few of those who have PMed me, Bluedog say that they’ve lent the money to their DC, interest free, as they like that principle, of students investing in their own future, but feel very angry about the high interest rates. Either “you’ll get 30k less as inheritance than sibling not going to university” or to be repaid on similar terms as the the loan company.

It’s interesting what a spread of opinion there is on all this.

OP posts:

BasiliskStare · 01/02/2020 05:08

Well - here you go - I will and I think @Needmoresleep and @Xenia take a different view from most

We have paid Ds's university fees & accommodation. ( Ds's university has relatively cheap accommodation. )

For these reasons.

We could. ( and not all can) - more DCs would make it not possible for us . In which case loans would be a prerequisite & I understand that many with 1 DC could not pay the amounts - I do know that - it was the choice we had.
We took a judgment that coming out of university without a debt was helpful ( possibly psychologically rather than financially or indeed both )
Ds's post graduate training for work means he can live at home ( and he does because we cannot pay for everything but he can do courses whilst living at home ) - and so he can stick money into savings
Not everyone who can pay fees can also give money for a deposit for a flat etc but not all those fee / loans plus interest are going to be helpful in ongoing out goings . So money earned by DS can be saved towards deposit - we are lucky in that post grad DS can live at home ( not all can ) ( a compromise )
DS made friends with a person who was on a reciprocal swap from the US with his college and said chap said - you do not know how lucky you are with the loan system - i.e. many where he grew up had to start a college fund from a DC's very early years
I'm not entirely comfortable with the view - take a loan because you may never have to pay it back. I think DS ( and we ) are debt averse if that is a thing. ( And and and I do get that this is not an option in many cases so I do know that) , but that money has to come from somewhere .

I have probably said too much & of course what I have said assumes there is some money to pay for fees etc & of course that is not the case in many many cases - but just a very personal view to counter the "take the loan in every eventuality" which seems to be the prevailing view ( & of course Martin Lewis

I realise I will not have made many friends by this post but just a different view - Right, exiting stage left.

LemonPrism · 01/02/2020 06:55

It's a waste when she could be using it to buy a house. Trust me... paying £50 a month from my wages just goes out with the tax vs having to save for a deposit/not having to rent!

She's being a fool

LemonPrism · 01/02/2020 06:56

And it's true, it took me 3 years out of uni until I had to start paying it

LemonPrism · 01/02/2020 06:57

DPs parents paid for his fees and it really doesn't make much of a difference to us. I'm worse off because I have a much lower wage but he could easily afford the loan payments. Our credit score is similarly good too

LemonPrism · 01/02/2020 08:26

Hm if she can do both then she can go for it if she wants

Xenia · 01/02/2020 08:42

I agree with Basilisk that for me it is also partly psychological - the principle that I pay for their education as my parents did for me and that the concept of take the loan as you mght never have to pay it back not sitting too well with me and most of all I can afford it - it is just like 3 more years of school fees and I don't want to spend it on fancy shoes or a second home or anything like that.

However I do understand both sides even for the rich as plenty of teenagers with very rich parents whom my children know even in myy daughters' day when fees were much less believe that if you make the child think hard and only take a loan for a degree that will enhance their career they might make better decisions than having a free ride for 3 years at a parent's expense.

LittleDragonGirl · 01/02/2020 08:47

Do not use it to pay student loans/maintence.
The same way it's not advisable to may advance payments on your student finance loans once you graduate.
You only pay back around 6 or 9% once you earn over a certain amount and most people never pay it off. It ultimately becomes a wasted invested and the trustee adviser is absolutely correct in his advice!

LittleDragonGirl · 01/02/2020 08:54

www.moneysavingexpert.com/students/student-loans-repay/

Xenia · 01/02/2020 16:34

It depends - you might be socialist as many mumsnetters are and want to pay more tax to help the less well off. May be I will win a Labour party medal for paying all these fees and relieving the burden on tax payers!

Copperas · 02/02/2020 14:24

My dad will start graduate entry medicine this year so 2 sets of student loans to pay off. He will have to pay 18% off earnings after £30k. Not a happy prospect

VanCleefArpels · 02/02/2020 18:44

@Xenia I’m definitely not in the socialist camp but still feel that we should pay for what we can rather than rely on the state 😁.

Xenia · 03/02/2020 12:05

Yes, my comment was tongue in cheek. I suppose I was producing a similar issue to those who are against lawful tax avoidance (rather than illegal tax evasion). Should we maximise what we cost the state or minimise it and should we maximise the tax we pay the state or minimise it - in all cases within the law?

SunshineAngel · 03/02/2020 12:14

Don't pay upfront. My parents insisted on doing this for first year, and also not letting me have a cost of living loan either, as they wanted me debt free. I suffered, and they paid a few grand they didn't have to. I do make payments to my loan now, but it's barely anything, and the vast majority will be getting written off.

DanH321 · 07/02/2020 21:40

This reply has been deleted

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

Patte · 12/02/2020 06:31

I paid mine up front and I've always been glad I did.

Technically your accountant might be right - a lot of people never pay the full amount back - but having to pay an extra 9% of your earnings for years is no fun either.

PBLR · 16/02/2020 19:04

She could hang on until she graduates and see what the situation looks like then. If she gets a London pupillage then living costs will be high and she might need to use it then. An additional Direct Debit would reduce the bill quicker once she s earning and therefore reduce over all interest payments. I did read somewhere that a debt of £50 000 paid back over the full period by someone on a wage of over £50 000pa would actually cost them £150 000 with all the cumulative interest so if the pupillage is good then press on to pay off the loan quicker then.

Gozogozo · 17/02/2020 19:14

Is it possible to pay it off upon graduating? I thought there were some punitive extra charges.

MarchingFrogs · 17/02/2020 23:25

thought there were some punitive extra charges.

www.gov.uk/repaying-your-student-loan/make-extra-repayments

Make extra repayments

You can make extra repayments towards your student loan. These are in addition to the repayments you must makewhen your income is over the threshold amount for your repayment plan.

There’s no penalty if you make extra repayments to pay some or all of your loan off early.

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