Living expenses at University- how much?

[Railingsohno]

We’re slightly on the back foot with planning as DS was taking a gap year but has changed his mind and is heading to university instead.

It’s a university in a fairly cheap to live city in England.

His much do people budget for after rent (assuming Uni self catering accommodation)?

Obviously feel free not to answer if it’s too intrusive but I would be very grateful to get some responses and how you worked out how much to give!

But at RPI plus 3 - that’s quite high if you don’t need to take out the loan. Surely you’d be better off paying if you can. That’s taking out the whole “who should fund it” out of the equation...

Are there any stats on how much is paid back on average? I wasn’t a particularly high earner but paid all of mine back before I was 30 (granted it wasn’t a huge amount)

But it's not your debt. It's your adult child's. And I say this as someone who paid for private education from 3 to 18.

Look for Martin Lewis's calculation on student debt. Most people only pay part back. Some pay none, if they don't earn enough.

@Railingsohno

But at RPI plus 3 - that’s quite high if you don’t need to take out the loan. Surely you’d be better off paying if you can. That’s taking out the whole “who should fund it” out of the equation...

Definitely read what Martin Lewis says about student loans and paying fees in full yourself. It's rarely a good idea. The money would be much much better saved to be used for buying a house in the future. It's not a usual debt. Look at calculators showing how much you repay and when.

We used to buy our DC a big box of pasta, tins of beans and tinned tomatoes . My son played a lot of sport at uni and always had to phone up and ask for more money for food. When our daughter went the maximum grant (not loan) was something like£750 . She wasn’t eligible but by the time she’d paid her rent in halls, bought the essential books and paid for a compulsory field trip, she had spent almost that amount.

I’ll look at Martin Lewis, thank you . We’ve always said (or maybe it’s just been implied) we’d pay for university as our parents did for us. We don’t want him starting with debt. I get that it’s not a normal debt though so I’ll look at the numbers (we both work in that field). We’re just so anti debt it’s our natural reaction!

The decision is not just the financial calculations. There is a bit of behavioural economics going on as well:

1. what is your attitude to debt
2. how much satisfaction will you get from giving your DC a debt free start to life.
3. how will your DC behave if it is your money they are spending. Mine knew that we were being careful with our money (our car, say, is 15 years old) in order to pay, so they have tended to be equally frugal.
4. Risk. To what extent can the Government change the T&C. Whoever is in power, the Government is going to want to recoup its Covid 19 money somehow.
5. Previous discussions have shown a sharp distinction between Londoners and others. There is a real London squeeze for young families when you have traded up to a larger home, are paying a mortgage and childcare. Student loan repayments would be an extra burden, which we are parents would like our DC to be able to avoid. I would like DC to have the freedom to chose their careers and where they live, especially as it looks as if both want to work for the public sector.
6. The mortgage down payment...I would prefer to support my DC at 18 than 28. There are fewer strings. Who knows if I will approve of their life choices, and want to support them in a decade's time. There is also various assumptions about whether they live in the UK, whether their jobs will support a mortgage etc.
7. Personal, but politically I am a small state person. If my DC want to take a degree which is not likely to lead to well paying job, they can, but I do not see why relatively low paid workers should subsidise them.

One weird things about MN is that some posters who would get very steamed up about the idea of supporting DC, when it was clear that they were very well off and able to supplement DCs loans by significant amounts.

These decisions are individual. There is no wrong or right.

And OP don't forget that many DC will have p/t jobs at University.

@Needmoresleep thank you- that puts it very clearly. We will read up and have a think.

We are paying my DD's rent. Her grandmother is paying her tuition fees.
She has applied for the minimum maintenance loan. I expect we will give her another £200 to £300 a month. We will pay her phone and unexpected extras.

Ds is first in the family ever to go to uni. Here's our plan - hopefully he will be fine

We are paying for halls (mid tier , shared bathroom £6500) . He is taking the student finance for tuition fees and gets minimum maintenance loan of about £3500. We were really worried about the level of debt for an NHS career that won't pay masses ever. Having read Martinlewis smith, DS (and we) understand that's it's a graduate tax that he's very unlikely to ever pay back in full so interest rates etc don't make much difference . He might as well borrow what is takes to get through uni without running up credit cards / overdraft

We will pay for stocking of bedding / kitchen stuff for halls, first big shop and half of text books .

He's got to fund his car with insurance(needed for shift work on placements) parking permit , food and fun spends out of his maintence loan and savings . He's worked and saved since a paper round at 13 (now McDonald's) and paid for his own car insurance and bought a Mac laptop this year. We know he can budget, save / look for discounts , cook the basics and clean.

To be brutally honest since covid furlough for DH and my zero hours sports events work disappearing we would find it tough to do more.

Unless the shit show government u turns he should qualify for the £5k NHS bursary which will give him significantly more to live on . His course doesn't have the regular longer holidays plus the placements mean that it will be difficult for him to carry on working whilst at uni

We will really struggle in 2 years time with a potential overlap of DS in final year and DD staring first year

1. The fees are about £9250 a year and as someone helpefully put anbove minimum maintenance loan of about £4300 ( max if you are badly off is £9200 outside London roughly). So the state expects parents to make that 4300 loan up to the 9200 maximum but they are not obliged to do so. Therefore a studen with parents of low means might be borrowing about £18k a year (fees plus full maintenance loan) x 3 years.

1. However they pay 9% of salary over £26K back (not the interest rate etc and capital that is the loan) so it is not a simple calculation. Eg if they become a teacher on £30k a year for life they pay back 9% of £4k every year - i.e. hardly anything. If they are my London lawyer daughters on £100k in their 20s though they would be paying a lot back may be £7k a year back. My children most of them have done reasonably well so I felt it was better just to pay the whole student fees up front each year and pay their rent and then then pay them the £150 a week which I pay through the year. I know others will say that is stupid as they might never work so never have to pay it back but it is about what school fees were so let me save the tax payer some money (and I share the views in the useful post of needmore above).

1. Quite a few well off parents do choose to ensure their children graduate without student loans. My 5 children and I had a deal that if I did that then they must not take on any other debt and they have all stick to that. I am about to support the twins for 2 years of post grad too and just paid £20k fees for the 2 for this coming year already.

1. Most students have a student loan but by no means all. One of my twins has a lot of friends with no loans of any kind.

If you are finding it hard to get the figures to add up, it is worth asking about bursaries. Some, UCL and Imperial are examples, but many Universities offer something.

By 18 most parents know what their DC are like. DD was never particularly interested in money, and had friends who were similar. This is despite being at a school with a number of fabulously rich families. Indeed seeing some try to prove their worth by flashing the cash, like having not one, but two new iPhones on the morning of their release, was an effective inoculation. You can't buy friends or respect.

Ditto at University. The girl with the brand new BMW, a reward for having achieved her place is almost starting with a handicap when it comes to making friends (unless she plays sport and others need lifts). DD had quite long terms so all in all she spent about £75 per week and her friends, similar. Her University has a reputation for attracting better off student from the South East, and if DD had wanted to hang out with them she would have needed more. Instead her group, largely from Wales, Ulster and the north, and mainly from state schools, are quite outdoorsy, so surfing, hiking, wild swimming, and camping, rather than clubbing.

DC who like buying new clothes, spend a lot of toiletries, or like sitting in bars and cafes, rather than having friends round and cooking for them, will spend more. Parents should not feel obliged to fund a student lifestyle that they themselves cannot afford.

gets minimum maintenance loan of about £3500

My DS gets the minimum loan amount which is £4289.

Think of it as a tax rather than a loan/debt. They don’t pay anything back until they’re earning over £24K (ish can’t remember exactly). Then it’s a small percentage of anything earned over that.

DD gets the minimal maintenance loan and we top it up to cover her accommodation fees. My in laws pay her £200 a month to live on .... she manages ok although reading some of these posts it doesn’t seem a lot!

And I buy the occasional food shop, send her the odd £20, and have sent food/drinks to her table in wetherspoons via the app.

£24K is a relatively low salary in London.

One reason why London parents seem to take a different attitude. You really don't want to be paying an additional tax if you are on a relatively low wage in an expensive city.

If you want to give your DS a head start in life, you might want to consider putting £4k a year into a lifetime ISA to build up a deposit to buy a house instead of using that money to pay for maintenance at university. The government pays a 25% bonus on the ISA so for every £4k you put in becomes £5k. The ISA can only be used as a deposit to purchase their first home, otherwise you can't take the money out until you are 60.

www.gov.uk/lifetime-isa

Both DDs get almost the maximum maintenance loan amounts. DD1 gets a Cambridge bursary and support from a science trust. DD2 received a university bursary for her excellent A level results last year, so we only give them what we did before they went away, £100 per month.

DD2 will be in a shared house this year in a cheap city. She has surprised me with her financial management in that she set herself up a spreadsheet and put all her fixed costs on it like rent and travel. Then she divided what she had left by the number of weeks and that is her food, supplies and entertainment budget. I think it's £88pw for this coming year.

Both DDs are vegetarian when at uni (but happy to eat fish & meat at home) because it's cheaper and have also self-catered for the same reason. They are happy to experiment with their cooking. In her first year, DD1's college had a minimum spend on catering which she struggled with, but that has now been abolished.

When we drop them off, we try to do a big shop for tins & dried foods to keep them going. My father wanted to get DD2 a present last year, so she asked for an annual travel pass. Covid meant that she didn't quite get her money's worth but it meant that she could always get home from a night out. Her new house is within walking distance of her department and a large Morrisons. DD1's department is close to a large Sainsbury branch so she goes there after labs. They are rather good at spotting yellow stickers and other bargains!

(I believe the current loans threshold is £26,575. People saying it does not make sense for parents to pay - why would you not want to do the state a favour though and save the state and the less well off money? Even if none of my 5 ever earned over £26k then I would still have paid for them not to have student loans)

The ISA can only be used as a deposit to purchase their first home, otherwise you can't take the money out until you are 60.

Presumably the house has to be in the UK, yet a fair proportion of DC can expect to spend part of their careers abroad. And another group may never afford to buy, or not want to. Our observation (central London) is that DC need to be earning a fair whack before they can think of buying, whilst the limits on the ISA are relatively low. Better then not to be paying an additional tax, than using student loans to put aside savings. (On property, the pattern we see is parents helping out when they retire out of London releasing capital.)

But as Malbec suggests, plenty of students get by at University spending very little, whilst others, even if their parents are not rich, can spend eye-watering amounts. DD too is largely vegetarian at Uni.

I was comfortable on about £75 a week, but I didn't drink or go out much. £100 a week would probably have been easier.

Re loans I think it depends whether you're going to take them out at all:

If you have to take them out in 2nd and third year you might as well get them in first.

Same for if you have to get tuition you might as well get maintenance.

If you can fund the whole lot, or you expect them to be an extremely high earner, t's a different story but otherwise their loans won't be paid back whether they have £25k or £50k and they'll pay the same amount, because it functions like a tax.

DS managed fine on £300pm - self catered university halls so no bills to pay.

Food for thought. Thanks. Don’t want to go into personal financial stuff here suffice that say we can afford to pay and he’s already got money saved for a flat deposit. Not sure he will be a high earner, he’s pretty laid back and not money driven. We’re not in London.

My parents got me to do a budget before I went and based my allowance on that. It was a useful exercise

True @Needmoresleep. You can't use the money to buy outside the UK or for a buy to let but you can let the property if you have lived in it as your main home and then go abroad to work. Even in London, there is always the option of shared ownership.

It is actually possible to take the money out before the age of 60 in an emergency but there is a 25% penalty so you lose the government bonus and £62 for every £1000 you put in.