Best way to fund accommodation/living costs at uni

[bananasplit07]

My daughter is starting uni in September, living away from home, in catered student accommodation and I'm confused about the best way to fund her day-to-day living costs, so looking for advice/experience from others.

I am in the process of divorcing my husband - we have lived separately for the last 2 years and are in the middle of agreeing the financial settlement. My ex said that he would support my daughter financially while she's at university, but he now says he meant she should use the savings we built up for her since birth, which were meant to be for a house deposit. The savings are about £30K, which won't cover all the accommodation/living costs for the duration of her degree, but he then says once all the savings have been used up, she should apply for a maintenance loan from the government. I don't agree with this at all, as he is a very high earner and I believe he should just pay to support her from his own income.

If he refuses to pay from his own income, I'm wondering if it would be financially better in the longterm, for her to apply for a maintenance loan straight away, based on my income, rather than use her savings, and supplement this with a part-time job.

Although I know having to pay back the tuition fees and maintenance loan will be a financial burden on her in the future, I think it will be easier for her to do this monthly from her salary, than it will be for her to build up enough savings for a house deposit once she's finished uni started working, from everything I've heard.

What do you think/what would you do in my situation? Do you know anywhere I could get financial advice about this?

Is she taking the loan for tuition fees anyway? I would take the maintenance loan as well tbh. You can’t force her dad to pay to support her.

What level of maintenance loan would she get? There’s a calculator you can use.

My dc took the loans even tho they also have some ££ saved up over the years from various other sources.

Take out a maintenance loan with the tuition one, it's the not the same sort of debt, it'd more of a tax and it's all combined together. Most students do this and I'd keep the money you've saved for her for a future house deposit. She can do some working as well, balance it out with studying as it depends on how much maintenance loan she'd get since it is based of household income.

Take the loan and then talk to ex about paying the gap if she doesn’t get full loan. Why are men into punishing their dc by being so mean? Tell dd to speak to him and it’s Dd that must apply for the loan. I’d crack on with it snd dd needs to speak to her dad!

Thanks everyone for your advice, it’s good to get other perspectives. I’ll speak to my daughter about it so that she understands the implications and I guess as the savings are in her name ultimately she can decide what to spend them on.

@bananasplit07 She needs to understand loans and the responsibility of parents to fund maintenance at university. It’s always been parental responsibility. She also should be made aware of the consequences down the line of spending the savings money now. They were not earmarked for this and it feels very wrong to divert them because her dads spat the dummy out.

It’s a poor decision because she cannot replace this money and how are you and ex going to? Just saying it’s hers is a cop out and let’s both of you sail into the future whilst screwing up hers and she might eventually resent that. Unless you have £30,000 in your back pocket of course.

Find out what loan she is entitled to.

My dd gets the minimum loan and we top it up to the maximum loan. I pay for their phones and data. Then they decide how they are going to manage. One lives more frugally and doesn’t work and the other has a job and more money.

Both of my dc considered the cost of accommodation before they chose a university.

Do like everyone else and take the loans, he is under no obligation to pay towards uni.

Would you be able to use the money saved to put a deposit on a property now and get a joint borrower, sole proprietor mortgage? Maybe your ex could be the joint borrower(guarantor effectively). Then get a place big enough she can rent a room or two out to cover mortgage while she lives “free”. Then at the end of Uni she can sell having lived “free” so hopefully lower debt and with an asset to sell.

@Skybluepinky Yes he is!!! There is a parental contribution if dc are not on max loan. There has always been a parental contribution and it’s not changed. He cannot walk away when it suits him. He has responsibilities and contributing to university is one of them.

It's not an easy decision about whether to pay the expenses up front or get out a loan, because it depends on the salary your DD goes on to earn in the years after uni, which is difficult to predict (Martin Lewis discusses this). Personally I'd get the maintenance loan and keep the savings for a house deposit, but as I say, that's not necessarily the right answer financially. You and your ex should contribute to her living expenses if the loan isn't enough, and she should also get a job. My 19yo DS doesn't work in term time as it's quite full on, but he works in the long uni holidays and saves up.

The savings will be much more valuable as a house deposit, rather than for something she could get a loan for. Depending on her job, she may never pay the whole loan off anyway.

If you're the resident parent, then she takes out the loan based on your income, and it's up to you to top up the loan awarded to the max amount.

You obviously factor this in to the finances required when sorting out the financial split as part of the divorce.

DS works in all holidays to help fund term time. But get maintenance loan to help fund accommodation too. There may undoubtedly be a shortfall but hopefully dad will step up to help when DD is actually at uni. DS has savings from the Government child trust fund which we added to over the years. They are currently in tact.

Current plan is designed so that more people will pay it all back. The highest total payments will be made by those on a mid-type salary, like a teacher (more than 2x the amount borrowed). Independent voices did point out when it was released that Plan 5 will be worse for women than men.

There is no legal obligation for parents to contribute or top up the maintenance loan.

Using a house deposit to pay uni fees sounds like a waste of a house deposit. The amount repaid in loan will be vastly smaller than the amount of savings needed to replenish the house deposit - and she wouldn’t have the advantage of being able to buy a house until it was done.

You have to be exceedingly wealthy to be able to afford full tuition fees, plus full maintenance loan, plus substantial gift for a house deposit and it doesn’t sound like you are. If your ex DH is (and maybe he is) he might decide that the £60k (at least) that full financial support will cost him over the next 3 years could be better invested somewhere else. It’s entirely normal for students to take out the loans and work too, and entirely normal for parents to “top up” the loan to the tune of around £5k a year rather than £20k. If you were still together and his income was “our” rather than “his” would you still be in favour of basically quadrupling the cost of support?

30k is clearly not going to last - tuition fees for a 3 year standard course will be only a few hundred short of that so she would need some sort of loan. Maintenance loan plus tuition loan is in the £60k ballpark. Obviously losing the house deposit but still having loan repayments is the worst of all worlds.

Her dad should be in the hook for half of the “parental contribution” as a minimum. That is a moral obligation only. The loan amount is calculated in the income of the resident parent (and their DP if also resident) only and the parental contribution is expected to be paid by them. This is also a moral rather than actual responsibility- nobody is going to make any parent hand over their money and some students end up with minimum loan and no support whereas others get full loan based on their mums low income and a generous allowance from their high earning dad.

Slightly off topic - but I’ve noticed a trend on here (in other, previous threads about uni fees / loans etc) that parents pay the accommodation fees and then allow the minimum loan to be used as spending money for food / entertainment etc etc (min loan is £4900ish). Which means that students are getting a really large amount of money per month for spending (I remember reading previously that it was around £500 per month).

We have always thought that dc should learn to budget, so our eldest has been getting £300 per month for food and living expenses / course expenses / entertainment while at uni (in self-catered accommodation and bills included in rent). We have occasionally topped up with sums when there have been student society trips planned; but generally dc seems to manage well on that amount. They shop in Lidl, and are proud that their cereal is only 80p per box! When in catered accommodation last year, they got £250 per month, as they had to buy meals at the weekends (and used to buy them out / at a cafe), so it was more expensive.

But I’ve definitely seen an assumption on MN generally that parents pay the accommodation costs and the min loan is for spending - which I think is too much.

This is also a moral rather than actual responsibility- nobody is going to make any parent hand over their money

some students end up with minimum loan and no support

The latter situation is difficult enough as it is, but at least the student can decide to start university anyway with what they can get, and work very hard at obtaining employment to make up the shortfall. Introducing some form of legal coercion into the mix re parental contribution to the student's living expenses would probably lead to pressure on some aspiring entrants into higher education not to apply at all, as much as it would sting parents into making a contribution.

Ultimately, it would be the DD's loan and therefore her decision whether or not to take it, but a very pertinent point is that (once past the point in the academic year at which loans for that year can be applied for, which is ?some time in May), money from existing savings - which can be used any time, for anything - used for living expenses can't be replaced.

Something else to consider is that if the OP's DD decides to do a Master's degree, although there is a non-means tested loan available for that, it is a fixed amount (no separate fees / maintenance elements) and a lot of universities pitch their course fees at more or less the level of the loan, thus leaving all living expenses to be funded on top from another source.

My dc took the loans and used their (smaller) savings for gap years / post graduate study. As a single parent I couldn’t help financially after uni (and their dad never helped at all). Given the eye watering interest rates it’s probably not the best financial decision but it is more like a tax and keeping the savings meant they could follow their interests which they wouldn’t have been able to if they had no money in the bank.
It’s probably not a house deposit v maintenance loan argument her life could go in a 1000 different directions and the savings could end up used for something totally different. My DS is using his to change subject / career direction as a post grad. It’s his money his choice.
I would definitely suggest she keep some savings so she has a buffer and choices after uni.

You think living off of £4900 a year after rent is a large amount, really? It's a very small amount, and I don't know any non students managing on so little. I think parents sometimes think its for "food", but it has to cover so much more. Transport, haircuts, books and Uni supplies, toiletries, clothes, laundrette, household products, prescriptions, dentisty and healthcare, phone, utilities (in private rented), gym membership/sports fee subs, and maybe even a modest social life! It's less than £100 a week to cover everything bar rent.

It’s more than that in practice tho as surely many students come home for the holidays so it covers less than 40 weeks, not52. I think it’s not too bad tbh.

And yy @TizerorFizz sadly her dad is not legally obliged to pay anything. Morally yes for sure.

Most students manage with a loan plus a job plus whatever their parents can give them

my ex matched what I gave DD - I told her to just ask him for it as I was confident it could easily do that

@kitchenplans when they were in catered halls they did have to spend a huge amount on launderettes, but this year in a self-catered house they have a washing machine, and bills were included in the accommodation costs.

It’s not £4900 over the year, it is more like 30 weeks at uni, so it’s just less than 8 months in total, so around £500 + per month. Haircuts happen during holidays, and I pay!

Maybe a lot depends on how they socialise - what they do (and where they do it) can vary a huge amount in cost.

Also, the course does not have many ongoing expenses.

But they are very active in a couple of student societies, so prob have trips away quite a few times a term.

I know costs will vary a lot depending on different curcumstances: location / type of course etc. When I was looking to see how much dc were given per month at uni (when mine started) it was typically around £250 - £300; and now just a couple of years later it seems to have morphed into the whole min loan, so £500+ a month. I am not criticising anyone at all - obviously it is a personal choice; but I did want to say that parents shouldn’t feel pressured to give their dc the whole min loan as living expenses / spending, as I think (with budgeting) it’s possible to manage on less - depending on circumstances. As I said, we do top up occasionally if there are unusual spends in a month, and I will buy clothes when needed, during the holidays.

It would be really hard to live this frugally in many cities. My son is hoping to go somewhere with no big supermarket in town - just a Tesco express. His course is really full on so there's no time for a part-time job etc.

Save the student says the average student spends £600 per month apart from rent.

@Penfoldfive that’s really interesting, thanks!
Looking at that, I think my dc is quite lucky in some respects - virtually no transport costs (as walking distance to campus / pubs / city centre), and of the £130 on going out, takeaways, events they prob only spend a fraction of that, as tend to socialise in friend group from large house share, and don’t tend to do major drinking sessions out! Course is very full on, but I don’t think there are ongoing course costs.