Idiot’s guide

[Penelopetu]

Hello. Kids are doing GCSES at the moment but are definitely on track to go to uni and I need to get my head out of the sand in terms of finances. Is there an idiot’s guide somewhere in terms of how it works now? I imagine we’ll be well above any means tested allowances if they exist any more. If anyone has a link then I’d really appreciate it!

https://www.ucas.com/discover/advice-for-parents-guardians-and-carers

This should be a good starting point. I’ve also seen a Facebook group called What I Wish I Knew About University recommended on here. Good luck!

Your child gets a fee loan and a maintenance loan. Fee loan is not means tested and maintenance loan is means tested. If you're above the thresholds your child can still get the minimum maintenance loan which is about £4.5/5k.

Many parents pay the accommodation fees and then let the student use the maintenance loan for their spending money. It is paid in x3 installments.

As an example I know 3 students just finishing their first years - all of the students only got minimum mainetenace loans. Parents A paid £700 pm accommodation (not for 12 months though, only for the 9 months of term). And the student got a job to top up the maintenance loan.

Parents B had the loan used that to pay the accommodation up front in full and needed to add about £3k to that pot. They then give their student £300 pm spends.

Parents C very similar to Parents A but also supplemented the loan because the student couldn't get a job despite trying. So an extra £150 pm on top of the accommodation costs.

Student finance depends on where you live - each home nation has a different system.
Go to the gov.uk website and search student finance - you can then see what the system is for you.

https://www.gov.uk/student-finance-calculator

This is the case if you live in England.
Different systems exist in each of the Home Nations, so do check.

Your child applies for the loans in the March before their starting date (there is usually a deadline in order to guarantee payment near start of term but you can actually apply up to nine months after the course starts). For maintenance loan, If household taxed income is less than the threshold (currently about £65k), and your child wishes to borrow more than the minimum, they tick the box and insert the details of the parents (this includes step parents/partners of the parent if they are living together). The parent/partners get an email asking if they support the loan (this is poor use of words, you are not being asked to contribute or guarantee the loan), and you normally just need to provide your tax number and SFE will cross check with HMRC your PREVIOUS year tax return. It’s a sliding scale as to what the student will get. The tuition loan is paid direct to the university and is not means tested.
Important points: this is a loan, not a grant. The student pays it back (and the loans are combined into one amount)
Interest accrues from the day it is paid out.
‘Taxable household income’ is generally the parents and adult partner of the parent (if living together) if parents are separated/divorced. It must be where the child normally resides - they can’t suddenly say they live with the other parent if their income is lower just to get a higher loan (though I’m sure people do this).
The student will not have to start repaying the loan until they leave university and start earning above the threshold (currently £25k), and then 9% will be deducted automatically from anything above that. They have 40 years to repay it (under current plan 5) and if not repaid by then it will be written off. The majority of people will pay it off, and the longer they take to do so the more interest they will be paying.
There are differing opinions on whether, if affordable, a loan should be taken at all or whether it should be paid back faster etc. Personally I would not want the burden of this loan if it could be avoided. Interest is at 4.3% now but previous loans have been as high as 8%. You will be directed to Martin Lewis videos about student loans but be aware these are outdated and may not be applicable to all circumstances.
Many students will not get a high enough loan to cover accommodation/living expenses. In these cases either the parents top up, the student gets a summer and possibly term time job (not easy as many students will be applying), or they may take a gap year to earn and save. Or a combination of above.
Accommodation costs vary widely across universities so should be part of the criteria when reviewing choices. Also be sure to take in to account living expenses for years 2 & 3 as most leases will be for the full year, irrespective of whether it will be occupied for all that time.

I find this helpful for student finance as you can see all the household income bands in the table if you scroll down the page.

https://www.savethestudent.org/student-finance/maintenance-loans.html

We have one through uni and one at uni. You have said "kids" so if you have two at uni at the same time this will cost you. We had one after the other. Ds's maintenance loan is the minimum, for this current year ending that is £4767 the full loan if he was entitled to it would be £10,227 so we are "expected" to top up by £5360. His accommodation is a few quid short of £8k and he needs money for food, laundry, course materials, socialising etc.

Accommodation costs vary wildly so start looking now. Some are the pretty much the same cost with a slight variation but not by much ie Durham. Ds is at a uni where the most expensive self catered accommodation is £233 per week for a standard 40 weeks, en-suite room (no move out over Christmas and Easter) down to £91 in a flat of 12, they all share the kitchen, The bathroom is shared between 6 students, so 2 bathrooms per flat.

If they live at home and commute you would forego the accommodation costs. Options are live in for the first year to make friends, live at home for years 2 and 3 and commute in. Work for a year and save it all to pay toward uni, work whilst at uni.

@Penelopetu it's also worth taking your (children's) head out of the sand about what they want to achieve from university and whether it is the best route to achieve it. There are many thousands of jobless and disappointed graduates who regret taking on the debt because there was no dream job to walk into on graduation.

Thanks so much - lots to think about! Yes, two kids a year apart so potentially at uni at the same time. I’m currently part time and looking to go back to full time work for the years this applies! Off to look at all the links…

This guide to student loans from Martin Lewis is really useful. www.moneysavingexpert.com/students/student-loans-england-plan-5/

Parents B had the loan used that to pay the accommodation up front in full and needed to add about £3k to that pot. They then give their student £300 pm spends.

Assuming this is in England (and the basics as to whose loan it is and when it is paid out are pretty much the same in the other home nations afaik)

• it's not the parent who takes out the loan; it's the student.

• they don't get it as one lump sum at the beginning of the year; the first instalment is paid once they have enrolled at the beginning of the academic year and the other two at the beginning of the other two terms (even universities which run courses on a semester basis also have three terms for finance purposes).