Probably a dumb question - but where do you find the money from to support your student DC?

[Wowzers71]

Hi

Eldest DD is 17 and will likely be heading to uni in Autumn 2023 (assuming she doesn't stuff up her exams). I'm only now starting to get my head round how the finances of this might work. DH and I earn over £65k a year so DD would only get the minimum loan, and having had a wee look on several threads about money on here it sounds like many of you are paying around £600 a month on accommodation for your DC. That seems like a lot of money!
So how do you afford it? Are we just rubbish with money? I just can't think that we will be able to drop £600 a month without really tightening our belts. And we've got a younger DD too, so there's no way I'd be able to support them both. Am I missing something? Or should I brace myself for "the porridge years...."?

Point is, each of us has our own set of circumstances - some through decisions we have taken (for example having 3,4,5, or more dc rather than 1 or 2 / buying a house with a bigger mortgage / spending freely for years rather than saving / having holidays abroad each year / hobbies / newer cars / having one parent as a SAHP rather than both working / etc.,etc.etc) and some through totally unexpected and not planned for circumstances (dc turned out to be triplets / being widowed / being divorced / being made redundant / being unable to work though disability or illness or accident / etc etc etc.

What we have to do is start from the point each of us is at, and help our dc make decisions about what they want to do.

Which can include of of, or some combination of

• taking a year out, working, and saving


• taking 3 years out, working, and being completely independent


• working in holidays


• working in term time


• both


• living on a tight budget (as used to be the norm for the overwhelming majority of students)


• choosing university carefully, taking into account accommodation costs and other living costs


• parents at least giving the amount of money saved by the child no longer living with them (our food bill went down a LOT when dc1 went to University ....plus no pocket money, no 'subs' for things he belonged to, less petrol used taking him to places....probably saving through him not having long showers each day and gadgets plugged in and less washing etc etc if we'd monitored that).... it might not be huge, but, combined with other things they can do, it all helps.

Our DC will only qualify for a partial maintenance loan if they go to university. Unlike some of the more organised parents on this thread, I didn't realise maintenance loans were means tested based on parents income until fairly recently. Consequently we haven't saved for this and wouldn't have had the spare money to do so anyway.

DS1 is 19 and is considering going to uni in September. At the moment he's working locally and saving up. By the end of the summer he'll have around £15,000 in savings which he can use towards his living costs if he wants to go.

Taking a year out has been hugely beneficial for DS1, his job has increased his confidence, he's made some money, he's passed his driving test and he's planning to go travelling in the summer.

I'll be expecting my other two DC to do the same if they want to go to uni.

@lakeswimmer
I find it quite odd that anyone with DC hasn’t thought about university for them. I’m aware some areas have fewer DC that go, but it’s pretty well known that DC take out loans and, as I’ve said earlier, parents have been asked to contribute for 60 years! It really isn’t a new concept. It’s the tuition fee contribution that’s relatively new.

@MissConductUS
I wonder if some Americans are caught out by DC suddenly wanting to go to university and have not saved? There must be some? You do neatly illustrate the need to think about this from birth and find out what might be needed. I worked out private uni for DD in the USA would cost us £250k so DD took up her option here. I think people here, mostly, can save modestly for DC and did get the government saving scheme.

Many people might not be sure their DC will go but lots now think they might go. What others do isn’t necessarily what your DC will do so some planning is a good idea.

DC get the full maintenance loan money if you are a single mum on benefits. Full loan and bursary possibility too. These DC are well off when compared with others whose parents won’t pay up.

You are all so thoughtful. I didn't even finish uni that long ago and I just had to get a job regardless of my parents making a decent income. It wasn't even a thing that they'd support me.

A lot of parents can't afford/ don't want to contribute much, even when they are in income brackets that mean their children don't get bursaries etc.

As others have said, in some ways uni finances are actually most difficult for young people whose parents are on decent incomes but don't/ can't contribute for whatever reason.

They will just need to take out a loan and get a part time job. Potentially defer a year whilst living at home and saving up. It's perfectly doable and you just contribute whatever you can/ want to towards living costs.

I still don't think it's necessarily common knowledge that the student loans are parental income dependent, for all many of you disagree that it is the case.

MNetters are generally an unusually over involved group of parents, many of whom seem to totally micro-manage every aspect of their own and their family's life! Most people don't operate like that.

Well quite. If it wasn't for me my brother and sister in law would be pretty clueless on student finance. They didn't know that DSA even existed (their dd is entitled) and they had no idea how student finance worked.

Did anyone ask why they didn’t know? How did they think DC would be financed?

@Ohsoworried
Im assuming you didn’t apply for a maintenance loan at all then? If you did, you would have to declare parental income unless you already supported yourself. That’s quite unusual for 17/18 year olds.

They thought it would be financed by student loans. They didn't think about it in the same way as they never thought about how school and college is financed.

@TizerorFizz
I wonder if some Americans are caught out by DC suddenly wanting to go to university and have not saved? There must be some? You do neatly illustrate the need to think about this from birth and find out what might be needed. I worked out private uni for DD in the USA would cost us £250k so DD took up her option here. I think people here, mostly, can save modestly for DC and did get the government saving scheme.

Student finance is very complicated in the US. I'm assuming that the 250k quid you worked out for private uni was based on published tuition and fees. Almost nobody pays the full amount. It's a starting point for negotiation, like buying a car.

There is need based aid and "merit" aid that universities offer regardless of need. Here's a brief intro:

www.bestcolleges.com/blog/merit-based-vs-need-based-aid/

What this article doesn't make completely clear is that there are a number of rating services that rank colleges and universities in the US. The single most important factor in the ratings is the average standardized test scores of the most recent incoming class. The colleges use merit aid as a way of enticing students with high standardized test scores to enroll, which then raises their ranking. It's very much a mutually beneficial transaction. Other factors can raise your merit aid offer too, like sports participation.

You don't really know how much a private uni here will cost until they admit you and offer you an aid package. And they are negotiable. We were able to get additional merit aid for my son by showing his first choice that his second choice had offered him more merit aid. The trick is to apply to universities where you will have standardized test scores in the top 25-30% of the applicant pool. With our kids, they wound up getting merit aid that offset about 40% of the standard tuition and fees.

our state university is one of the cheapest in the country and if dd attends there it would be around 100k for 4 years if she started now. 250k could be a state school or private. The private schools she might actually apply to are around 80k a year right now so we expect it to be 100k a year by the time she applies in a few years.

something like 98% of the students at my DD’s high school attend university. There are huge parental expectations for education that are strongly correlated with parent education and income.

Ponderingwindow, good point about the state schools. Many are very good, and much less expensive than private universities. I'm in New York and know many people who have attended one of the SUNY schools.

To @TizerorFizz's question, I think that a lot of parents who find themselves without much money saved for uni turn to the state university system in the state where they live. As residents of that state, they qualify for much lower tuition and fees.

@MissConductUS
@Ponderingwindow
It was Parsons, New York. DD did get a small scholarship and fee reduction from them but with accommodation and flights does add up. Brits don’t qualify for anything regarding additional discounts. We are obviously not in State or ex military for example. I searched high and low to see if we could reduce the fees. This was to start in 2013. So no doubt more now. We basically thought $60,000
pa was the starting point. $40,000 fees, $20,000 living costs.

I was shocked at how much was expected. I was lucky, went to uni, last year of no fees before new legislation came in, Donkeys years ago, got grant paid rent, had 3 jobs, nothing from parents, never even took a student loan!

Was surprised when loads mentioned paying for accommodation outright by parents, and then leaving the remaining maintenance grant for them to live off. £4.5 minimum maintenance grant / 31 weeks of term = £145 per week. That's alright, I'd live off that!

Ds's catered is £6k. Dh will contribute a small amount to that. And give ds1 a very small weekly amount. I expect him to get a job.

Is it really the norm to make up the maintenance grant from 4.5 to 9k
(4.5k), Or pay for accommodation totally (can be as much as £6k or more)

Ie parents paying 4.5 - 6k
The norm?

TizeroFizz, I'm sorry that didn't work out for your DD. Parsons is a very specialized uni, so they can really pick and choose as they want. Their only real competition in the US is the Rhode Island School of Design. I think your estimate of $60k pa was probably spot on. If she had been applying to more mainstream colleges I think she would have been offered more merit aid, as they value geographic diversity in the student body.

@TizerorFizz I didn't say that it didn't occur to me that my DC might want to go to university, I said I hadn't realised the maintenance loan was means tested.

Because DH and I are both working (combined income of £60K) we are expected to top up but our modest incomes as charity workers and our fairly high living costs in a rural area mean we can't afford to do this. Even if I had realised earlier, we still wouldn't have had the spare cash to save up.

Our solution is for our DC to take a year out to work and save towards it. This brings additional benefits; work experience, valuing their education because they've contributed, an extra year to mature and consider if it's what they really want, lower overall debt than if they'd had a full loan. It's not bad thing.

I do think the system is flawed. A friend of mine has recently got divorced. Her income is very low, her ex's is quite high (more than mine and DHs). Because she's the resident parent her DC get full loans despite their Dad earning decent money.

So you just thought the tax payer paid for all the loans - all 100% of them and you had no responsibility? Why would you think that?

Taking a year out also puts him on the new Loans scheme (2023 starts) with a much longer pay back period. He could be way out of pocket over the next 40 years. Basically you say you did no research into financing his university costs at all and he’s now having to pay more by starting in 2023. Did you never talk to any friends or friends at work about this? Do either of you have degrees? I certainly of see value in work but I wouldn’t be proud my DS was subsiding me because I thought there was a magic tree.

You could always try for better paid jobs. Yes, as I’ve said: be a single mum and DC get full maintenance loan and probably a bursary.,

So you just thought the tax payer paid for all the loans - all 100% of them and you had no responsibility? Why would you think that? But why wouldn't you think that, knowing that the loan debt has to be repaid (unless you never earn a 'graduate' level salary)?

I don't think it's helpful, or kind, to lambast another poster for their choices. Their DC will be fine working and starting next year. As we all see, there are many benefits. Life pans out differently for everyone; should be no judgement on that.

£4.5 minimum maintenance grant / 31 weeks of term = £145 per week. That's alright, I'd live off that!

Well so would I, except that isn't what they get to fritter away.
They will have to find the deposit for Yr 2 accommodation (usually around Christmas of Yr1)
They will then usually have to start paying rent on their Yr2 accommodation (out of Yr1 loan) from 1st July - so have July, Aug and September's rents to pay before they receive the loan for year 2. That is quite likely to be £1200 - £1600 to be needed from Yr1's loan.

@Louise0701
The loan doesn’t have to be repaid! Why would anyone think that? It’s essentially a grad tax and it’s going to be over more years. It’s based on ability to pay. The state has not paid 100% student maintenance since the 60s. I’m not lambasting anyone but there’s quite a lot of choices being made without all the facts. That’s very unfortunate. Using money earned by DC that could go toward a house deposit might be a very poor idea if the finances have not been worked out.

@MissConductUS
DD had a good alternative here so took that. If parents don’t take out saving schemes in the USA they then choose cheaper universities that could blunt their prospects. I always think DC here should aim high and universal loans do help with that ambition. However, as in the states, I’m do not agree the state should pay for everything . It didn’t when 15% went to uni and it’s not going now nearly 40% go. It’s unsustainable given all the other calls on taxation.

@TizerorFizz i think you have me confused with another poster.

@TizerorFizz I assumed, rightly or wrongly, that my children would be able to borrow the money which they would then pay back.

You could always try for better paid jobs. How dare you lambast me for my choices, for choosing to spend my working life in the voluntary sector and helping other people.

I'm a responsible hard-working parent raising three thoughtful young people. One of my children is disabled and is likely to need life long practical support from us which we are factoring into our financial planning by trying to buy a house which will be suitable for his and our long-term needs. This is one of the reasons we don't have much spare money.

I certainly of see value in work but I wouldn’t be proud my DS was subsiding me because I thought there was a magic tree. I don't see how my child is subsidising me. He's an adult. He's saving to cover the cost of his education.

Taking a year out also puts him on the new Loans scheme (2023 starts) with a much longer pay back period. He could be way out of pocket over the next 40 years. So any parent who has a child born after 2003 is irresponsible because they didn't give birth in the right year?

Gosh Tizeror you really unkind. Just because you are high earning- do you think uni should just be for parents of rich kids?

I went in 90s and "fees" weren't even a thing. We had a small student loan for maintenance that in those days was possible to pay back within a few years and with p/t work was managable. I think the most was around 3k a year then and there wasn't serious interest. It has changed hugely since then. I'm glad uni was a possibility for most who wanted to go then or I wouldn't have gone - if Id been told it would be 15k plus of debt I'd have seen that as too much at 18.

It is a real shame that it will come down to parents financial situation. It really shouldn't .

£4.5 minimum maintenance grant / 31 weeks of term = £145 per week. That's alright, I'd live off that! The simple truth is that not many student lets are only 31 weeks though. Most seem to be at least 40 weeks (if in official student accommodation), and then once they have to go to private rentals, they're on year-long contracts. So much more of their loan/parental subs are going towards accommodation than need be (or used to be) in an ideal world.

For example, final year students just about to complete their studies at the end of this month - many are locked into contracts until July or August. So they're paying an extra circa £1K for the privilege, without necessarily wanting to still be in their university towns or cities.

And think of all those students paying for accommodation they weren't living in during the pandemic lockdowns (particularly the first). Money down the drain feeding the coffers of buy-to-let landlords.