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?

yep, no need for that FOI - all already ready available in the public domain.

The House of Commons Library is a pretty good source for summary reports. This one on student numbers (from last March) wil likely soon be also updated. https://commonslibrary.parliament.uk/research-briefings/cbp-7857/

and if you want to get into the real nitty-gritty www.wonkhe.com is great, and of course www.hesa.ac.uk

Martin Lewis says of Plan 5

• 52% of students will pay off the loan (amount borrowed + interest)
• 48% of students will pay for the full 40yrs

So actually, it is likely to be repaid in full not unlikely.

Thank you @WombatChocolate. You've summarised exactly our concerns. It's the impact of compounding interest and the long long term impact. I hadn't considered DS would likely still be paying it off when his kids go to uni.

Where are you getting £160000 over a lifetime figure? What loan and what salary?

Loan for fees. Loan os enough for rent and some fun. We pay the rest.

I think there is a new report coming out on 19 June which may update the figures

https://wonkhe.com/blogs/social-mobility-is-about-to-die-and-university-wont-help/ a bit of a lengthy read but picks up and expands on some of the observations made by @WombatChocolate

On Plan 4 vs Plan 5:
https://www.if.org.uk/2022/02/25/regressive-student-finance-plans-will-punish-low-and-middle-earners-the-most/
For example, a graduate who earns a starting salary of £30,000 will see their lifetime student loan repayments increase from £29,000 under the current system to £68,000 under the new system, using the following assumptions: 3% annual pay increase; a repayment threshold increase of 2% annually; 3% RPI; and a student loan debt of £45,000 at the time of graduating.

Under the same assumptions, someone with a starting salary of £50,000 would have their lifetime repayments almost halved under the new system, from £109,630 under the current system to £61,743 after the reforms.”

Note that since this was published, the repayment threshold of £25k has been frozen until tax year 2027. Currently minimum wage is £24,420 for full time work. minimum wage will exceed the repayment threshold by the time the freeze expires. The freeze can be extended at will by the Gov.

Second note that since this was published tuition fees have begun to be increased annually again, so average debt at graduation will likely be more than £45k.

My dc are in Ireland so happily only 2000 euro fees which we pay. We pay accomodation and give them 500 euro a month to live on, supplemented by their summer jobs.

I see this said a lot and don’t understand it. Surely the point of going to uni is to increase earning potential- and so it’s highly likely the loan will be repaid? Otherwise what’s the point of going?

Martin Lewis has not got it all covered unfortunately and I am worried that a lot of people are basing big decisions on an incomplete information set. That said for most people loans for both tuition and living is the only option.

Well some of us believe in the love of learning for its own sake.

Also it may be that your earning potential was rock bottom before and now it's a bit better. Or (more seriously) you want to go into a low-paying career such as creative industry but that asks for a degree? I know many people in middle age who work as creatives and don't pay top rate tax.

My DC aged 24 earns 36k and pays back £50 per month. He also receives a bonus of around 3k, I’m not sure how much of that ige pays off his student loans.

Other posters have covered the details already re gaps in Martin Lewis advice.

I don't think it is good financial sense not to take out the sfe loan for tuition fees. So many fees are never paid back that you are better taking out the loan and giving the kids the money it would have cost you.
My ds graduated from 4 year degree about 8 years ago is on around £100k and owes more now than when he graduated. He pays back peanuts each month

Nothing wrong with learning, I’m still learning well into middle age. But I doubt that’s the primary motivation for so many kids going to uni and getting themselves into debt. There are just no realistic alternatives.

If you come back to the HE Board in May when SFE opens you'll discover that many, many families didn't even realise that they wouldn't be entitled to the full maintenance loan on a household income of £50k, let alone giving tuition fees on top.

I plan to pay tuition fees for DD and provide general financial support for her to emerge from university debt free. Otherwise she will be paying it back with a very unattractive interest rate. And I do expect she will be working with a salary to trigger it, otherwise I see little point in her going to university for all those years.

Well my “love of learning” comment was slightly tongue in cheek.

It’s certainly possible tho to need a degree for your work and earn less than the threshold. Friend of mine is band 5 comms in the NHS which is less than £30k but requires a degree.

Ds is working the summers which will pay his maintenance.

Ex and I will pay his tuition fees to avoid him carrying 9% tax and a ludicrous rate of interest.

student loan for tuition fees, funds travel through her part time job. lives at home as i am a single parent so no option for extra money to pay for accommodation. she is able to commute and loves it. had no interest in the social side of it.

That article is outstanding! Thank you for posting it.

"In 2022/23, a record 54,700 entrants were marked up as “no award or financial backing. In the original £9,000 fees system, it made little sense to opt-out of student loans – because the vast majority never paid it back in full by design. But now with a cheaper (in real terms) tuition fee, a frozen repayment threshold and an extended term of 40 years, the calculation has changed – suddenly it makes much more sense to avoid the debt if you can."

"If we compare two graduates – one with 40 years of graduate repayments ahead of them, and one without, it doesn’t take long to clock how impossible social mobility becomes for otherwise notionally equal graduates. Then assume that those getting their fees and costs paid for them while they’re a student are clustered into the Russell Group and its signals already – and lay on top of that the fact that those without a windfall coming are more likely to be those with a pretty thin “student experience” and so without the skills or cultural capital to cheat the socio-economic odds, and you pretty quickly need to give up and go home."

I'm actually a teacher, in a comprehensive, working with the full range of socio-economic profiles, including a lot of bright disadvantaged students (FSM) who have the option of going to uni. It's given me so much to think about in terms of the advice and guidance I provide going forward. I wouldn't deter young people from going, but they need to go into it with their eyes open. I'm not sure that's currently happening.

This thread is so insightful. The poll currently has 18% of parents paying the tuition fees, which was my original question.

I paid my DS’s fees as it was clear to me even 5 years ago that Martin Lewis’s advice was flawed. I understand his motives in terms of not putting off students on low incomes but it didn’t make sense to me that DS borrow money under terms that could be changed at any time when we could (just about) afford to pay it. We saved for the fees for some time (largely because my older step children had not had to take on such a debt and we wanted parity). Also paid for a masters. Waiting to see if DS will get funding for his PhD place for next year. Slightly balking at paying for that as a career as an academic looking an increasingly bad bet. If I don’t the money will go to DS towards a flat so it’s up to him really.

And that’s ridiculous. No one needs a degree to work in comms.

That puts you very far out of the bracket representing anything like the average UK family.