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?

Just a thought @Carrythelight

That 5% is the overall figure in England. I’d imagine it undoubtedly varies a bit by Uni. I doubt both Durham and Derby are 5%, or Cambridge and Canterbury, or Oxford and……Actually I suspect the percentages for Oxford and Oxford Brookes might not be that different.

I didn't want DS to have any student debt hanging around his neck (he's in his 1st year at uni and is likely to be a high earner) so I saved the max amount into a JISA since he was 9 years old which gave him the full amount for all uni costs when he turned 18. (Which I know is a huge taboo on MN, but he's incredibly sensible and split it into 3 and put two thirds straight into ISAs for the 2nd and 3rd years, using the other 3rd for year one - which he's within budget on, so it's all going according to plan...)

I certainly never said people just need to cut back a bit to afford student fees! I am very lucky to have been able to afford school fees (20% iof sixth formers are in private school) and one set of school fees is pretty similar to the 9250 fees plus rent plus an allowance so private school parents just have to keep on paying what they have been paying for years. The other 80% (probably more than 80% as some of the 20% paying school fees will have some bursary money) there is no way they could afford to pay fees. I can and I am glad my children have no student debt.

However I also understand the reasons some parents who are rich choose not to help because they want the child to stand on his own two feet and pick a course that will be financially wise later etc.

We're getting a loan.

DD will repay it back based on how much she's earning. I think it's written off after so long too. So really there's no point in paying in full because a loan might cost less anyway, or so I understand it.

Tuition fees will be paid by my parents. Incredibly lucky as DD is an only GC. they also contribute to accommodation and we pay rest. DD gets minimum loan and also will work in the holidays. Also has sponsorship grant from an software company. Applied for this herself.

@ArtemisiaTheArtist , it's written off after 40 years which for many people will be when their own dc are going to uni. The terms changed in 2023 with the salary at which you start paying back (£25k) also reduced. With the increase in the minimum wage this month £25k is now just above the minimum wage full time salary so everyone working full time can spend 40 years paying back their loan if in a low paid job or a career that starts on low ish pay etc .

It's the suggestion that "cutting back a bit" is something that most people could do that grates.
A bit like being able to buy a house if you just stop eating avocado on toast.

Perfectly fine for the poster to say that they are in the fortunate position to pay the fees so choose to do so. There's already been other posters pointing out they were used to paying private school fees so they saw tuition fees as a continuation of that.

TBH my main thought on reading that "cutting back a bit" would save £15K a year for each child (so £30K for 2) was that the poster must be incredibly profligate currently.

I was only giving my experience,not commenting on what others do/should do
I thought that was the point of a discussion forum
Will leave you all to it

It’s amazing if you can afford to support your DS going to uni and coming out debt free but I’d not suggest going into debt for it that you can’t afford or may impact your retirement.

My brother, sister and I all got full loans and grants (I had a wonderful, comfortable childhood with a finance director dad then he started and lost a business in my first year at uni, so don’t cry for me!) It’ll take me another few years to pay off and I was on the lower loan intake BUT amongst my friends who had to do the same the money going out each month is just a fact of life. My husband lived at home but took the loan for fees and other loans (he didn’t need, he overspent on holidays and nights out!) and has paid his loan off which was >£20K.

so yes, if you can afford to help him, it’s a HUGE difference but if you can’t he’ll be following a lot of others doing the same. Just make sure he takes a degree that’s valuable in whatever he wants to do in life and that he truly enjoys and won’t regret/drop out of after your investments. If he wants an apprenticeship (I’m a lawyer) they’re a great alternative and I’d suggest he keep applying, even with a uni place.

@ArtemisiaTheArtist yes, a loan might cost less. If your student only earns a very low wage or has lots of part-time employment, or years out of the workforce then paying up front will have 'wasted' the money. (Clearly there are some benefits both financial and psychological to not having a loan). Nobody can know for sure exactly what will happen with any one child. But loans are now structured so that most people will pay them back in full. And for most this will include paying a lot of interest as well. So you might clear the amount of your original loan amount after 20 years, but you then spend another 20 years paying down the interest. (Or you might earn shedloads and pay it all off quickly helped by the fact that the interest hasn't had years to accumulate).

For us, we made choices about 10 years ahead of uni, which involved what I’d call ‘cutting back over the long term’
For us, this meant saving £200 per month or £2400 per year.
Over 10 years, with some interest, it will have produced about £28k or the amount needed to fund tuition fees.

It meant we’ve had basic UK hols most of time and not gone on the more expensive hols we might have had. So not sacrificing avocado on toast, but also not going without hols etc either.

To put it in context, we are 2 public sector workers who have never earned enough to pay higher rate tax. We know we have far more than many families and marginally scrape into the income which means only the minimum maintenance loan would be given.

This was for funding one child. We know lots have to fund 2 or 3 who overlap at uni.

I don’t think judgement is being made about families who don’t choose to fund more for their kids. We know lots won’t have the income to do so. It is also the case that many didn’t think about it and plan for it from birth or 10 years before. When you start thinking about it the year before, of course there are probably less options. Many people also make choices such as having bigger houses or family holidays to build memories or whatever ….all choices.

I suppose I’d say that if we’re talking about professional middle class, middle earners like ourselves, most don’t have loads spare but most also have enough to be able to make some choices about their spending priorities - when kids are small, we can choose to upsize our house and mortgage, the kind of holidays we will have, and consequently some of the savings we will have, such as towards our own pensions or savings for kids for uni or house deposit etc. It’s all just choices - and many middle class families who want their kids to go to uni can have some of these options but not all.

Sometimes circumstances change along the way, someone loses their job, a divorce happens etc and you have to change your financial plans. Life is always happening and is often costly.

Thise feeling there is judgement that they have not sacrificed enough to pay their kids uni fees - I think you might be being overly sensitive. Maybe your income is such that even if you’d planned from birth you couldn’t have saved 2 or 3 hundred per month. Maybe you had to take a very large mortgage to have a house big enough for your family. Maybe you decided your family would get more benefit from living in a house with a big garden or with more bedrooms or in. A better area and that boosted your mortgage by the two or three hundred per month. Maybe for 15 years your kids had bigger bedrooms and lived in a better road, but then later needed loans for tuition feeds We all make choices for our families. Each choice means at certain times we feel we have more than similar families and at other times we have less. We have to decide what matters to us most and think about the short and longer term consequences. No right or wrong. I just think of myself as lucky to have had enough to be able to make some choices along the way.

The masters year is costing us as a family around £30k. It made far more sense to fund this when loans are so readily available for the undergrad years.

If any of your DC have the option to take an integrated masters v a stand alone masters afterwards, always opt for the former. Unfortunately you can't get an IM for humanities in England.

My foster child will get a loan for University course fees. He'll get a loan for accommodation, £2k from LA and we'll buy his food.

My foster child is doing an integrated Masters in Cricket Coaching and Management at Worcester University. It's a 4 year course with an option to travel to Australia, Shi Lanka or New Zealand in third year, or he can split travel between 2 x 6 months in 2 different countries.

@caringcarer Now that is niche!

On masters years there is now a masters student loan of about £12k - it becomes relevant e.g. for LLB students who want to fund their SQE (law post grad) for the year after the LLB but it only covers course fees for law not maintenance. I think if you take that masters loan your student loan repayment percentage changes from 9% to 15%

Obviously, the vast majority cannot afford to pay the tuition fees and have no choice but to take up the loan. However, I take issue with anyone wealthy saying it is money wasted to pay the tuition fees upfront if your child never earns enough to pay back much or any of their student loan. The money is only wasted if they do not engage with the subject, take no part in extra-curricular student opportunities, and/or learn no useful life skills for the duration, because they could and should find something else to do with their time instead in that situation. Something of value is something worth paying for, and not having debts hanging over you, which affect your judgement, is a great position to be in.

The minimum wage full time salary as of 1 April is £23,800. The payback earning level since 2023 - plan 5 - is £25k, anyone working full time from the April after they graduate on Plan 5 will be paying back part or all of the loan over 40 years.
The telegraph has an article on"the crippling effect of student debt on high earners" on Plan 2 today - sorry I can't post a link.

@poppybuttons Martin Lewis says the opposite. High earners pay it off. Lower earners pay it off for longer and pay more. According to MSE. The best bet is getting the high earning job and of course SAHM’s won’t pay much. If dc only get minimum wage job, then university has been a waste of everyone’s time and money.

I think it’s for the person who took the degree to decide for themselves whether or not a degree has been a “waste of time and money,” rather than to firmly be told it has been a waste of time and money for “everyone.” In the case of a minimum wage job, I would say it’s the loan terms that are the problem, not automatically the degree experience, unless you are of the view that people in minimum wage jobs are of little value to themselves or society and don’t deserve any experiences that are not financially profitable for society as a whole. The same applies to the SAHM - would they view their degree as a waste of time? Will it make no difference whatsoever to them or their family that they had experience of higher education and, possibly, higher level employment prior to parenthood? Will it make no difference to them if their circumstances change? Should a degree trap a person into a certain type of employment throughout their life, regardless of their circumstances and the reasons for any changes to their circumstances?

I think it’s for the person who took the degree to decide for themselves whether or not a degree has been a “waste of time and money,” rather than to firmly be told it has been a waste of time and money for “everyone.”

Loans come from the taxpayer, therefore it is definitely a societal policy question of whether they, and the degrees they fund, are a ‘waste of time and money’. Everyone is entitled to form a view on the principle of spending huge amounts of taxpayer money on degrees that do not add to the productivity of the UK. They are entitled take the view that that money would be better spent elsewhere to improve the UK productivity.

@Walkaround I have every respect for people doing minimum wage jobs but they don’t need a degree to do them taking a loan of circa £45,000 and paying nothing back. Could be more like £60,000 for some and it’s debatable if this country can afford that. If their families pay for everything , that’s different.

We have a £250 billion liability on loans for students so it does matter to future taxpayers and it’s why 40 years repayment period was brought in. The burden of unpaid loans was too great. If people are trapped by HE they don’t have to do it but don’t take a loan if repayments are not what you want. With 38% of young people going to university, responsible fiscal lending and borrowing must be a consideration for us all and outcomes matter for society too - not just the individual.

Precisely why I said it was the loan terms that are the problem, not the degree. @TizerorFizz needed to frame more accurately what she meant by a “waste of time and money.” She does not mean the degree itself, as it’s fine, apparently, if you can pay for it yourself, it’s the financing of it. Ie the cost, not the value. You could say the same for insisting everyone stay in school until they are 16. Or letting people do a degree in medicine and then give up, or go part time. Is that worth the cost for society? If there were stricter terms on cost and repayment, would you get enough people willing to sign up to it at all when they are only 18 years old? Or would it become a wealthy person’s game again?

Which article was that? I was intrigued so bought the hard copy edition. The Matthew Lynn article is accompanied by a picture of uni students but the article itself is, well for 24 / 25 paragraphs, about NEETs and non grad income. Nothing in the Money section of the paper.

can you give a few more clues? Or was it just on the online edition?

@boys3 , sorry I think it must be online only as on the telegraph app you can also see the print editions and it doesn't appear. Due to the number of adverts inserted I can't screen shot the whole article but I have attached a few bits.