Student Finance

[mumtosnchild]

My daughter is currently in Year 12 and we have started visiting uni open days. She wants to go away to university. Looking at student loans though, it looks like she will only get about £5k due to our household income which is around £69k. Halls of residence we have looked at so far are coming in around £8-£9k. How do students manage to pay this if the parents cannot contribute significant sums?

I was kind of under the illusion that the student loan would cover this but it seems the system expects the parents to contribute thousands of pounds to support their child/ren at uni.

I know there is part time work but that is not guaranteed and not sure how much that would amount to.

Help gratefully received as I find this all quite confusing.

Thanks all. Your comments/experience are all very useful to me. So I think the options for us are for DD to use her child trust fund, get a part time job with a parental contribution from us as well. That or she needs to stay at home and find a uni she can commute to (she is not keen on this idea though). I am honestly shocked about how much some parents seem to be contributing and the state expects this without looking at what our outgoings are. We live in London and have our own not insubstantial mortgage to pay. It's almost like paying for two properties!

We weren't really expecting her to want to go to uni so feel a bit unprepared. I will however start increasing what we are saving.

I can't see that we will be making that much of a saving for her not being at home as child benefit stops next year and we don't pay hardly any travel as we live in London (free bus pass). It would just be not paying for food, school dinners and any funds to go out.

It is in many ways very very similar to the system in 1979 in terms of parents. I got a very very tiny minimum grant and parents were expected to make it up to the full grant so students could afford rent. Yet many did not so that children of the middle class ended up being worse off at university than children of the poor who get the much higher full loan (full grant in my day). I still have some of my grant records from then. There is no easy solution for parents. In my case I was already paying school fees of about £18k a year so the university stage was just a continuation on of the pain.

The image was a scan of a section from a 1979 grant form asking parents to make up the minimum to the maximum...

And then it appears...... (I think MN thought it was "sensitive" rather than really boring)

I guess the savings depend on how much you fund. My DD did a lot of music in lessons and various groups which all came with a cost, plus dance class and a show each year which added up as well. DS2 did lots of different sports, again a lot of subs and fees to pay and kit to buy.

Please do take a moment to look at possible unis through a lens of “where is the accommodation cheaper”. It really isn’t £8-9k in every uni. Altho if an en-suite, rather than shared bathroom, or a catered hall is required then yes, it will be.

If you live in London btw then living at home might be an excellent option. Lots of varied uni options in London and close by, and plenty of chances to enjoy the uni experience (and then go home at the end of the night).

It’s expensive because we have this tradition of “going away to university” which is much less prevalent in other European countries.

The OP lives in London where there is a large number and great diversity of universities. It is not an “essential” but a “nice to have” to go away from home to university. (The position would be different if they lived in an isolated part of the country.)

Yep. I got a grant in the early 80s and didn't need to work either! It's so hard now

Thankfully my child's maintenance loan covers accomodation. That's because they were mindful of the cost of different universities and different types of accomodation. They decided not to have ensuite, which saved loads. We pay for shopping, anything else they have their savings and they work during holidays to save up money for spending.

That’s what the child trust fund initiative of Gordon brown was for. What did you save in that?

My son’s was worth the princely sum of £500. His friend, whose mum was a single parent in benefits, ended up with onky £300

I think with the child trust funds you have to start very early and you do need to put a little bit in them, every once in a while for the amounts to grow. We started them when the kids were infants and my MIL put in 40 quid twice a year (birthday / xmas). Both kids now have enough to really help with expenses when they start uni.

When the children were younger we just didn't have any money left over at the end of the month to put away for them. When they got older and we did have a little more we chose to invest it into things like music and dance lessons (both went on to study performing arts).

My parents refused to contribute to anything where they had no control as they had heard too many stories of young people going off the rails and spending money on drink and drugs etc.

I think my daughter will have about £9k in her child trust fund when it matures but looking at figures don't think that will be enough to fund her expenses over a 3 year course even when including the maintenance loan.

Just want to point out that the repayments only kick in when the person is earning over a certain amount (this varies according to which Plan they are on, but is around £29k).
The repayment is then 9% of the amount they earn over that limit - not their whole salary.
If their salary drops - eg part time, stop working etc then they don't repay until/unless they go above the limit in the future.

Our son left university in 2023 with a £75k debt (4 years) he's been paying it now for over 2 years and owes £79k.
I'm sure originally it was an interst free loan but certainly not anymore.

Plan 5 from Aug 2023 has a repayment threshold of £25k and the current full time minimum wage salary is £23,800 for 37.5 hr per week so it's envisaged they almost all students who graduate in 2026 will pay from the following April once they start work.

The state has always means tested the maintenance element, even when it was grants I had friends who got nothing and parents refused to support them. Working for a year or two before university is a good idea if money is tight, or there’s a possibility of a part time degree sometimes sponsored by employers. I had two at once at university! But I had saved £100 a month from birth to cover the costs

This is exactly why this needs to be discussed at secondary school orientation for parents at Y7 so it doesn’t come as a nasty surprise at Y12

Student loans have never been interest free. In addition interest starts to accrue on day one of having the loan, not once the student has graduated. Only very high earners will pay off all capital plus interest within the term of the loan. Far better to see it as a graduate tax

I would say to anyone looking at universities that costs vary quite a lot. The East Midlands universities, Cardiff and Liverpool for instance all have good private accommodation pricing for years 2&3 and my dd only paid £4.5k for halls (3 years ago) far cheaper than her dsis at another university (who thankfully was sponsored).

I would also point out to anyone with dc interested in engineering, the military offer excellent sponsorship packages from year 2 for those willing to join up for a set period as engineers, definitely worth considering.

Most of my DC's friends have the same set up as us. They get minimum loan and this is what they live on (food, going out, travel etc). The parents then pay their rent. As a result quite a few of them are at Northern universities rather than looking at London.

One of mine is at Lancaster and rent there in a mid tier room was under £7k.

We thought about doing that but it would have meant a much greater outlay for us and would have left ds with far more to live on than his friends who are on maximum loan.

HIs current rent is £7,000. So he uses his loan to pay for that and ew top it up then given him an amount to live on. He ends up with just over £60 per week to live on and our total contribution is £5,460.

To do it the other way our total contribution would be £7,000 and he would end up with just over £90 per week to live on.

Actually yes, I was wrong there!

I have seen you post on other threads. I think that £60 per week is unusually low to live on.

My DC is effectively on about £15 a day (£500 a month).

My daughter has roughly the same to live on. She is a mature student and so her maximum loan is not dependent on our income as she worked full time (and lived away from the family home for much of that time) for 3 years prior to going to university. I have asked her and she said it is plenty for her to live on. she struggled top find a job for ost of her 1st year and has only just found work over the summer. Another family member was given £50 per week to live on by her family throughout her 3 years at university.

My son chose to have a lower weekly amount to live on spread over the entire 52 weeks of the year rather than a slightly higher amount spread over term time only. This year he is choosing to stay in his university city over the summer as he has work commitments there. My daughter is choosing to return home.

I'm from an area where many families cannot afford to give their children anything. Some of my son's friends have families who struggle to pay their own basic bills & rent each month. If their young person wants more they have to get a job and earn it. I guess if you are used to living an extravagent life then you need more each week. If you are used to living more frugally then it is easier.