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?

It's totally standard for that kind of role

I would think that giving your child £27K towards a house deposit might be more beneficial than giving it to them for tuition fees.

But I suspect that the people who are doing this, are probably sufficiently affluent to do both.

(We don't know anyone who is paying their child's tuition fees).

For most of the reasons mentioned by @WombatChocolate i intend to try and pay tuition fees ( from an inheritance ) , I hope we can pay accommodation out of normal income 🤞.. they will need to work to cover anything else or take the basic maintenance loan .

Here is a fascinating piece on student loans - average debt and how people are paying them back and how much debt is being written off.

https://www.confused.com/student/student-finance-facts
Also shows the differences between different nations within the UK.

I found in particularly fascinating how government expenditure on higher education is now only about 1/4 of what it was 24 years ago.

This government report on page 16 shows take up for Tuition Fee loans was 95% so the vast majority of students have tuition fee loans so will end up with over £28K debt for tuition fees alone. https://researchbriefings.files.parliament.uk/documents/SN01079/SN01079.pdf

The interest that builds up on this alone is quite significant during Uni and in your early career before an average person starts paying back any significant amount. I.e. when they start earning more above the threshold.

Martin Lewis does explain it well. But with the loans for students starting now (there are several earlier versions of the loan with different repayment terms), the low salary level for starting repayments (barely above full time minimum wage) and the extension of the repayment period to 40 years, means that more students will be repaying in full, albeit over 40 years - so their entire working life.

When first introduced, lots of people thought they wouldn’t be paying back or they would only start paying back when they had a reasonably well paid job. This is no longer the case. The IFS estimated that 79% of students will repay their loans in full under the new system (compared to 49% under the old system). Obviously how much you will pay back is a guesstimate because no one knows how much they will be earning. This is a good tool for playing around with the numbers and assumptions:

https://www.student-loan-calculator.co.uk/

Most people will obviously need to take the loans, but they should also recognise what a burden they are. The “real value” of the loans now grows in line with RPI, but in absolute terms it will be a very large repayment if it is spread over 40 years.

I know no one will be crying over high earners, but there are lots of stories of for example medics with incomes of £100k, which we might think of as very high, but with very large students loans, loss of child care credits, loss of child benefit, mortgages/rent etc, who are finding themselves left with very little money indeed. Marginal tax rates (if you think of the student loan as a graduate tax) can be 80-90%!

I’m not saying that there shouldn’t be tuition fees, but I don’t think people should assume that they probably won’t pay them back or will only pay them back if they are well paid.

DD is taking the tuition fees loan only, we're giving her £1000 a month to cover accommodation and everything else. When she graduates we'll look at our own finances and decide whether or not to pay off the fees.

In Scotland, you repay 9% over a salary threshold of £31,395 and the interest rate is 4.3%. My son went to an English uni, (although Scottish) so had to still take out a tuition fee loans. I didn’t appreciate how favourable the Scottish repayment rates are compared to RUK.

Scottish in Scotland so no fees but I suspect that may change for those starting in the next year or two.

We really don’t want our DC coming out with loans so have focused on supporting them mainly be cutting back a bit on our own non essential expenditure

The vast majority borrow the money from student loans company

And just to add further, the repayment % fluctuates wildly depending on your assumptions about future earnings. The IFS projects 79% of students with the new loans will pay back in full.

We are paying everything. Tuition fees, accommodation and an allowance during term time. It is less than we were paying for school fees and we didn't want to saddle kids with lifelong debts.

We could afford to do one of these things

1. pay tuition fees for 4 years or
2. Give 40k deposit for a house (money has been saved gradually for her since birth). Spoke to our financial advisor who told us to def keep the 40k for a house deposit. We will fund halls and accommodation over the 4 years and DD will keep herself with savings and a part time job.

As you have seen, the vast majority have loans for tution fees.
We could have paid the tuition fees, but decided not to. The problem is that there is a lot of uncertainty about whether it ends up being better to pay the tuition fee or invest the money elsewhere and use eg for a house deposit. And the uncertainty is largely around future earnings. We decided we didnt want to make that decision for our kids (especially as my gut feel is that the optimal decision for our kids is not the same) or expect them to make it for themselves now. So our plan is to wait for a few years, then give them a lump sum that they can choose for student loan or house deposit as they choose, once they know more about their own situation.

Having said that, the terms are more unfavourable for most students now than they were. My kids were the last under the old terms. That changes the picture a bit.

But if it would be a struggle for you, then I wouldn't

Of course some people might be able to pay for the tuition fees and maintenance and give a hefty house deposit too! We'd find that a bit much,

My DD will have a student loan for the fees. We live in Wales so she's very lucky in that she gets £12.5k maintenance loan which some will be a grant and the rest she will pay back.

As I'm a lone parent she will pay back less. Her accomodation is £9500 a year and she'll have the rest to live on with some help from me.

We think she might get a £2k bursary as well from Welsh government.

I paid the fees and rent and an allowance and that was about the same as a set of sixth form school fees per year and I was happy to do that. However even for better off parents many for all kinds of reasons choose not to so. I also helped my children with a first house purchase so it was not an either or decision in our case.
in fact my much older son was moving when the twins were at university so my sons became landlord of his house and had the rent from that too on top of my allowance whilst at university when they were also tenants of their landlords there too - they only got the house money early purely because their brother was moving and it made more sense to keep his house in the family and start them on the property market at that stage - otherwise I would have waited until they were mid 20s.

DD took 12 months out working and saved every penny.
Rest is paid by student finance and nhs bursary.

We are low income and unable to support financially, especially with other DC still at home.
It's tough but she's managing.

Most people aren't in a position to save £15K (tuition fees plus mininum maintenance loan in England) a year per child by "cutting back a bit".

I appreciate that , but some are
We are and we do

Exactly. I'd have to "cut back" for about 5 years to get just one on my children through their first year of uni. People need to check their privilege.

I am sure they are aware of their privilege but some people do have the money and when a question is asked about how costs and expenditure then it is reasonable for them to share their experience too.

Yes but my point is, for most it's not a case of 'cutting back'. That makes it sound like those of us who can't fund it, aren't doing enough.

This is a radically different student loan system proposed by the think tank HEPI:
https://www.hepi.ac.uk/2024/09/26/undergraduate-fees-revisited/

Must admit that I found the Q very "only on MN".

DD has had to work for a year to avoid taking out the pitiful masters loan of around £12k covering both tuition & maintenance. That would be repaid at the same time as her undergrad loans. As many masters degrees now have fees in the region of £11k to £18k for home students, you're in negative territory before you even consider accommodation.