How is your child covering tuition fees?

[Carrythelight]

I'm trying to calculate to what extent we (exH) can help fund DS through uni. The thread 'how much do you give your child at uni' has been extremely helpful, but nobody mentions how tuition fees are being funded. Many of DS's friends' parents are apparently covering them (and accommodation and even living expenses) - but is this really the norm?

I'm not in a position to cover fees and accommodation (he's eligible for min ML and will get a job), however I could extend my mortgage. Do people do that?

@Delphigirl I think that's what has happened round these parts too. 9% extra income tax for life - no thanks. DS didn't actually want to go to uni for precisely this reason and so has tried hard to secure a degree apprenticeship, but has been pipped at the post every time. He now has an offer from Exeter and is excited, but we all need to go into this with our eyes open.

I'd love him to get a degree with minimum debt and all of the wonderful life skills and social experiences uni affords, but high debt is the reality for us and I'm not sure it's worth it.

See, this is what I've always thought, but I've begun wondering if it might be more like @Delphigirl describes, with parents not talking about paying the tuition fees - hence I thought I'd ask on here.

I agree with @Delphigirl, times have changed. People have woken up to the fact that student loans are not the “free money” of the past and are doing anything they can to avoid taking them. But people don’t like privilege and so it’s not openly talked about yet.

DD1, about to graduate, took loan for turion and minimum maintenance loan. Supported with living costs and top up rent by us and grandparents.

DD2 about to start, will take loan for turion fees but won't take maintenance loan. She is going to a cheaper university to live at, has great savings from a gap year and will be supported by us and grandparents and continue to work. There's a hope we'd get some retirement lump sum or money from grandparents not too long after graduating to enable the loan to be paid off before the E too much interest accrues. If I could pay tuition fees now I would. But we still have a mortgage and haven't been able to save a lot due to both being public sector employees.

Edited to add - fortunately they have money invested to cover house deposits.

Hardly anyone has their entire tuition fees paid by parents. Even at my independent school, back when fees were £3kpa, it was only a very small number of children from very wealthy families whose parents were doing this and they considered themselves very lucky. I very much doubt that there are many families with £27k available to pay University fees.

We are not taking loans for year 1 and 2 - we are covering rent and living costs and a wealthy relative is paying tuition fees. I hope we can do the same for year 3 but there are a few variables. Like others, we feel that an additional 9% tax on future earnings would be really oppressive and we don’t trust that the government will not change the rules.

There are loads. It is much cheaper than private school fees and heaps of us have been paying those for literally decades. There are also loads of high earners with kids at grammar schools for whom an extra £15k a year (equivalent to loan and min maintenance grant) is irrelevant. “Less than £1500 per month.
The reason so many people who can easily afford it - including those also supporting their kids applying to private us universities which will cost them $100k pa for four years - have not been paying until recently is financial illiteracy, plus a bit of misplaced “well they are adults now”. The former is ironic as so many of them work in finance but they are all waking up now.

Tbf I think if you have paid (been able to pay) private school fees throughout (not saying this is the case for posters on this thread!) then £9k plus (say) £10k for living exes could well seem manageable. Fair enough for sure. The stats quoted above still say that most DC take the fee loan tho. I think parents are aware of what it will mean.

Those stats are a bit out of date though clary and predate the retrospective changes to loans I believe. Would be interesting to see updated figures, I think they will show the trend I’m referring to.
but yes it is never going to be more than about 10-15% as it is only the wealthiest or those who have been saving for it who can do it.
getting grandparents to pay for it is also excellent IHT planning. Imagine knowing that by giving £15k for 3 years you are saving your grandchild tax payments of around £160k over a working lifetime. I’d go for that!

7% of you have been paying private school fees, and from experience, it's a minority of those who go ahead to pay Uni fees. You're talking about an extremely narrow subset.

Well even on the 2021 figure it is 9% who don’t pay the fees so not that narrow, but I agree we are talking about the top 10-15% max.

and heaps of us have been paying those for literally decades.

I have corrected this - "and heaps of mumsnetters have been paying those for literally decades."

Yes I meant “us” to mean those who are paying the uni fees but it could also mean heaps of mumsnetters.

It’s a while since my DCs graduated, but they all took out loans and received maximum help as I was/am on a low income. One of my DCs hasn’t paid a penny back yet (after 10 years!) as they are on a very low income. My other DCs are paying 9% like the vast majority of graduates do. None of them regret going to university.

we lived overseas when ds was at university and paid for everything. With Dd she has the loan for fees, but as she has a chronic illness it’s unlikely she will be able to work full time and therefore may not trigger loan repayments. The money we could have used for her fees will be used to support her with house deposit and or supplement her future income.

It isn't 9 percent on all your income, just on the bit over a certain amount, somewhere over 25k per year, not sure of the correct figure. So if you earn 1 k over the amount you only pay the loan on that on that 1k.

Currently around 28k iirc.

I think there is a real mix.
Some have budgeted to pay school fees but not uni costs, beyond topping up maintenance.

But lots of privately educated kids have it all paid for them - but as has been said, people don’t talk about it - that’s parents and kids, because people are aware they are a minority and it’s sensitive.

I think school fees are often contributed to by grandparents and the same goes for uni costs too. With people more aware of inheritance tax, giving grandchildren £10k a year for uni fees can be a good way to avoid tax. Grandparents with surplus income can fund fees by monthly gifting £750 per month, with no 7 year rule, if funding out of surplus income rather than capital. There are a good number of wealthy grandparents who have generous pensions or interest or dividend income who can afford to do this and are also avoiding later tax.

Another category loan their kids the fees on an interest only basis with flexible repayment terms.

With all of it, thinking ahead creates more options for lots of families. Deciding when kids are in 6th form and if you have limited savings/capital and are still paying mortgage will mean most can’t fund the fees on a monthly basis from salary. But lots of families with similar finances might have put away a couple of hundred wuid per month for 10 years, and with a bit of growth, would have the £27k for tuition fees.

Of course many could never afford to cover it, regardless of careful planning ahead, but many families have enough money to make some choices - some will go for more holidays or bigger houses or newer cars etc. Others who can’t afford private school fees might decide that across 10 years of more restrained holidays etc, they could cover 3 years of tuition fees or maintenance or both. Others will select to save for a house deposit. Lots of different options and always more by thinking ahead, for most.

My 2 who went to uni got part time jobs in hospitality and worked around their studies, as did all their peers
im on disability benefits and sent shopping and bits when I could, but that’s all.

We paid everything but it was cheaper than the school fees we had been paying for years so not really noticeable from a financial perspective- just prolonging the expenditure for a few more years. Not having deductions from pay now they are working is valuable. We felt it was a no brainer - but as I say in the context of having paid large school fees prior.

@Carrythelight 5% published here https://commonslibrary.parliament.uk/research-briefings/sn01079/

If you look at the Supporting Documents - Reference Tables it is all shown there - for students in England.

As @PerpetualOptimist noted 21/22 is the most recent year with the percentage take up shown, although loan values etc are shown up to 2023/24.

the 95% take up has been relatively consistent over recent years. Although I can see the possibility for a few percentage points movement with the new loan terms (moreso the 40 year repayment) period.

£27k is less than we were paying per child per annum for secondary school

I hadn't considered IHT. That's really good financial planning. Unfortunately my mum's not got the money either haha.

10-15% sounds about right. If 423,820 students from England were accepted into uni in '24 (Source: UCAS), and 27.8% (117,821) achieved A* or A (Source: gov.uk press release Aug 24) and 49.4% (58,203) of those came from private schools, then 10-15% not needing the tuition loan is probably about right. I know there isn't a direct correlation between private school and not needing TF loan, as this thread demonstrates, but it's interesting.

I've actually submitted an FOI to the Student Loan Company and asked how many students from England who went to uni in September 24 took out the tuition loan?

Sorry to focus on England, but obviously they don't pay tuition fees in Scotland, so it would skew the data. The A*A % above are UK, but I've just assumed they're the same for England.

@boys3 Oh wow, thank you

Yes, the 9% is only on the amount above about £26k.
But the fugure to look at isn’t just monthly or yearly payments for early career 20s. You also have to factor in compounding interest and the fact by 30s, many will earn more and at that point be paying more in student loan repayments as well as mortgages and childcare. Any many will still be paying it when their own kids go to uni as the repayment will be 40 years. Those decently earning but not top earning graduates such as teachers are likely to pay the most interest as it will take them the majority of 40 years to clear it, but clear it many will…paying more than triple what they borrowed.

So my view as a parent, is if I can afford to help alleviate that by some forward planning, I will. I wouldn’t sacrifice my own pension for it, not lengthen my mortgage for it, but I wouldn’t sacrifice be prepared to have cheaper hols for a few years or keep my car for another couple of years. And I’d do it if it meant my Dc taking just £5k instead of £9.5k of loan. I know that would mean their repayments in 20s etc would be exactly the same as determined by their salary, not loan size, but the debt would be cleared sooner as Ioan and total interest would be less - maybe cleared before they were paying their own childcare in late 30s. Would be a help without doubt.