Eligible for full maintenance loan - parent contribution?

[MovingtoEssex]

Hi

I'm in the early stages of getting my head around uni money needs for DD.

She's looking at Sheffield/Nottingham/Manchester where it seems that living costs would be about 10K, with accommodation being half of that.

STEM degree with good earning potential (so I would expect her to end up repaying all loans).

Due to my income she will be eligible for the full maintenance loan which pretty much matches suggested costs.
Should I be contributing too to allow a lower loan amount? Or put this money in savings for her to use later? Or something else?

There are younger siblings too to make sure I can do the same for.

If anyone could share what they decided it would be appreciated!

P.s. also posted in Money Matters

Students don't pay council tax.

For all but the super rich, it's a graduate tax, not really a loan.

The student pays 9% of everything they earn over £27,295. The amount of the loan makes no difference to this, it's their earnings that matter.

As a PP has said, Martin Lewis has a lot on student loans on the MSE website - one relevant page is here www.moneysavingexpert.com/students/repay-post-2012-student-loan/

@RampantIvy

Students don't pay council tax.

They may need to, depending on living circumstances, and it can certainly change the council tax situation at home.

Agree with Beyond - consider putting a bit by for next years accommodation deposits which might be needed before she gets next years loan payment (she can pay you back out of it).

And if you hear from other parents 'we're just paying for the accommodation' or we give xyz, REMEMBER their child probably doesn't get the full loan and they are either providing what they are EXPECTED TO or less (its misunderstood and unaffordable to many) - don't compare or feel you 'should' do the same. You shouldn't. Your dd is in a good position here. If she might need a masters degree for her career its worth knowing that if you do a four year integrated masters you get similar finance arrangements for your 4th year. If you do a three year course and then choose a masters you don't get the fees loan or much maintenance.

There is absolutely no point doing anything to reduce the loan amount because the total repaid for the vast majority of people is totally independent of the amount borrowed, and depends solely on the earnings over the next 30 years. The only exception is if your child gets very, very rich indeed (in which case the savings made from reducing the loan amount will be peanuts to them when they are in their 50s, so not worth you making any sacrifices to achieve that)

However the max loan amount isn't always enough to live on, so if you can contribute a little to supplement the loan that's a nice thing to do.

@MovingtoEssex I would wait and see which uni she goes to. If she is in campus uni at Nottingham it might only be 32 week accommodation for the first year, if she stays on campus. If like me you will fully find when they are home, food etc.

Also, they don't receive their loan until after the first week. So you It’s likely you will pay the deposit and help at the start.

My DD has learnt from her older brother. She has worked most of this summer to go with plenty of savings for Freshers week. He found the first couple of weeks expensive.

My last post makes no sense.

In brief:-

Take the full loan
Start saving now for deposit and bits for new room.
Encourage DD to save for Freshers week.
Help out as and when needed. I wouldn't commit to a weekly/monthly amount.

Is all the available accommodation only around £4000 p.a.? At most universities, there are halls at a range of prices and it can't be guaranteed that you will get any particular one.

@MarchingFrogs

Is all the available accommodation only around £4000 p.a.? At most universities, there are halls at a range of prices and it can't be guaranteed that you will get any particular one.

£4000 is, I suspect one of the very cheap ones. The cheapest at DS's uni is about £6,000 and he has been allocated one that is closer to £8,000. Although they can list choices they get what they are allocated.

When dc1 went to university they had a full loan. They also got a grant (it was the last year before the system changed) but whilst that sounds wonderful, the reality was that only half the grant was paid and the rest was automatically offset against the loan. It was very difficult to find any employment, although they did get regular shifts in the student advice centre it didn't pay especially well. We got a Sainsbury Student Meal Ticket. It's a two part gift card. Student has one card and parents have one. Parents load cash onto their card and student can spend it in their local store. I used to load it with a regular amount of cash and was also able to add extra at times to pay for treats. It is instantaneous - as I discovered when DC called me frantically as he'd overspent and was at the checkout. A quick dash to my local store meant he was able to buy his food! Apart from that we paid for things like mobile phone contract and train tickets for weekends home. I'm not saying it was easy, but we were happy to help out, especially as we knew DC was not wasting money. We also helped with cost of books when we could - a lot of their books were very expensive and it wasn't always possible to get them second hand.

My Ds got the full maintenance loan too. I was intending to give him a weekly allowance regardless but in the first week of him being at Uni he had to pay his halls rent up front, which obviously we expected but the rental period he had to pay exceeded the months that his loan covered. I think his loan payment covered September to January, but the rent for his halls was for up until February or something. I think it almost wiped his budget out and he ended up paying the full amount and living off what I gave him each week. I don't know if all uni halls do this or if it was something my son didn't think about in advance, but it's something to bear in mind.

Both my DDs have had full maintenance loans. DD1 has just graduated, DD2 is about to enter her 3rd year. We used to give them £100 her month when they lived at home so just carried that on. DD1 was awarded a bursary from Cambridge which pretty much covered her accommodation plus she also had a grant from the Ogden Trust. DD2 was awarded a sizeable bursary in the February of year 1 based on her A level results. This covered most of her 2nd year accommodation costs.

Both DDs self-catered. DD2 had a freezer so was able to batch cook and freeze meals. DD1eats a vegan diet when not at home. Both shop at the markets for fruit & veg. DD2 reckons she spends around £15 per week on food, DD1 spends less (but she is frugal and a very inventive cook). DD1 cycles everywhere. DD2 walks or takes an Uber home from a night out which she shares with friends.

In year 1, we bought DD2 a yearly bus ticket as her accommodation was 3 miles from uni. She used it until Covid struck. We also bought her gym membership for Christmas.

Both worked in a shop over the summer before uni. DD1 has worked in all summer vacations apart from year 3 due to Covid. They tend to save this as I don't charge them board when they are home.

Look at the accommodation weeks that you sign up to. 1st year accommodation tends to include all bills so once that is budgeted for, divide the rest of the loan by the number of weeks it covers/the term and that is their weekly budget for food, clothes, transport and entertainment. DD2 has a Monzo card and transfers her weekly budget onto that then uses it for everything. Once it's gone, she has to decide whether to borrow from another week or go without. She finds it works well for her.

@MarchingFrogs budgeting pages on those uni websites suggested just under 5K.

Thanks for all the suggestions and things to watch out for. It's much appreciated!

You CAN choose to take a smaller loan eg take the tuition free loan but not the maintenance loan but that makes no sense for most people as what you pay back is 9% of salary over 26k no matter what you owe in student loan .

So just let her live off the full loan. No need to top it up.

We’re in a similar position. If you check each university for bursaries you may be pleasantly surprised that you might be eligible for some extra money that doesn’t have to be paid back. Bursaries are usually based on parental income so I see the bursary as my contribution to my DSes costs. I’m divorced with a DS with SN so have worked in a fairly low paying, low stress term time job to support him for years.

My DSes looked at Birmingham, Warwick, Nottingham and Manchester and we’re eligible for good bursaries from all of them, which did help narrow down our uni choices.

@SusannahSophia I've just checked Nottingham and Manchester and she would be eligable. Amazing! Thank you and good luck to your DS.

No problem. I had no idea about them for my DS1 and it came as a very pleasant surprise when he started at Warwick. DS3 is just going into second year at Manchester and it meant we were much more canny choosing universities. Your DC has to agree to sharing household finances with the uni with SFE, but I think it’s an opt out rather than opt in.