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?

I assume lots of the eating out is things like grabbing lunch or a coffee on campus when you have a long day of lectures, not necessarily drinking.

We paid our children’s rent as we could afford it. They had loans to cover the tuition fees and worked every holiday to fund everything else.

It would be good to reduce the amount of expensive debt your daughter will be saddled with if you can afford it. The interest rate applied to student debt is unfairly high.

Do students really spend almost £400 per year on clothes tho? Don’t most parents buy them stuff? And what’s the interest payment for?

I pay mobile phone. Pretty sure neither of mine spent that on course materials either. Dd bought copies of her texts (Eng lit) to annotate but science ds has barely bought a book, all online.

I was thinking the clothes was low - my daughter wants some of those clog birkenstocks and she's saving up because they're over £100.

I guess it's an average so the interest will be because some take on debt.

It’s scary how much these things can add up (lunches / coffees etc). My son makes sandwiches every evening for the next day at uni. When I was paying for his lunches (school canteen at sixth form) it was paninis and snacks every day.. now he is paying he takes a packed lunch!

wow really? bit shocked at the debt tbh. Maybe I have led a sheltered life haha. But £20 pm – £240 a year for a student to service their debt?

DS2 does say that I am good at managing £££ and he wishes I would tell him how lol.

I guess I had DD at uni who was a cheapy/vintage queen, and then DS2 who really only cares about his sports kit in terms of clothes and will just wear any old joggers and Ts.

I think @bananasplit07 this just shows that it will really vary. DS2 has gym fees and sports club fees as a biggie every year and eats a lot; others will spend more on clothes or haircuts or eating out.

Slightly off topic but I have a lot of friends who’ve funded the whole lot for their offspring - tuition, rent and living. I’ve noticed a distinct correlation between those who have made no financial contribution
to their university experience and those who after graduation simply travel and waft about for years rather than looking for an actual job.

It was always important to us that our children contribute on the basis that if they don’t think a degree is worth it they shouldn’t be doing it.

@claryWe did buy dc clothes but other parents buy next to nothing. If they don’t make up the difference between loan and actual costs they are not likely to be generous with clothes either. My DDs liked their clothes!

If people are rich enough to find £60,000 plus per child for their degree it’s quite likely dc don’t need much of a job. Our dc took loans. They didn’t need to as we have money but we felt they had ownership of their futures.

The main problem with paying the accommodation for them is they don't necessarily have to take responsibility for affordable housing, because they're not feeling the cost. Parents who pay £7-8k for accommodation, leaving the £5k minimum loan for their student to live off, are going over and above the 'requirement' to top up to maximum loan.

We've encouraged dd to find accommodation within the minimum loan, which she's just about managed to do each year (going into 4th year now). We pay the bills, her phone, gym and car insurance and send her money for food each week - only £60 at the moment. We do end up paying for extra things throughout the year if she's struggling (eg we've helped with car repairs), but she's got a job at uni and one at home to pay for socialising, clothes, holidays and gigs, which are where all her money goes! She never seems to have any money, but she lives a very full life so I think it works ok!

My DC was in fully catered accommodation. We paid their bill which was just under £10k.
Then they had £2400 or £800 a term for everything else. Based on a 10 week term, that was £80 per week and was plenty for going out most nights, the odd takeaway, society memberships, travel home and actually covered a holiday in the summer too. So this was far less than the full minimum maintenance loan amount.

@crazycrofter I think at some university cities this would be virtually impossible! Where has halls for minimum loan these days? Not many cities I would think. It greatly limits choices snd as you can see, lots of parents are paying £13,000 pa per student at least.

Yes but catered accommodation is a bit of a different ballgame. I think most ppl here are talking about SC accomm and whether or not the min loan is enough to fund food and fun if the rent is paid.

But most accommodation isn't catered.

£80 per week (as you gave your child for "other", plus say £40-50 for food would add up to more than the minimum loan (most Uni accommodation contracts are for 42 weeks by the way, so calculations should be made on that. Neither of mine have done as little as 30 weeks per year.)

Yes I agree, 10 week terms only applies to a few unis, most are 40-42 weeks over the year.

Yes, but the rent is for those weeks, but most freshers only stay at uni until term time. They don’t need food money the ither weeks as they are at home.

My DC had £12.25k in total for the year. £10k was for the catered halls. £2.5k was for other stuff.

No unis have term lengths of 40 weeks. They might make students pay for 40 weeks of accommodation (the £10k my DC paid covered end of Sept to end of June - so about 44 weeks) but each term was 10 weeks.

Rent is one cost. it has to be paid for how ever many weeks the uni or private contract is. Food (for those in self catered) and socialising etc is a different cost and is largely determined by how many weeks they are at uni.

From yr 2 onwards, rent is often for the full year. Some students will stay at uni all year round and need to pay for food the whole time. Those staying all year will usually have paid work either in the hols or in term time, so be able to fund some of the extra food and socialising costs. But in many unis, most students go home in holidays and eat their parents’ food.

My DC haven’t worked in term time, but have had a summer holiday job for at least a few weeks, always earning £1k+. They’ve found this to be a useful extra, but the £12.25k has been enough to cover all their basic costs. In the second year, rent was £8.5k, so they had £3.75k left for food and bills and everything else. It was plenty. They tended to allow £15 a week for bills year round. Food was about £40 per week of term time, plus maybe 4 extra weeks whilst still resident in uni town, and spends were in the region of £40 per week in term time and less in hols.

They did not do lots of buying clothes on eBay, vinted or in shops. They went out at least 4 or 5 nights a week, but could often go out for less than £10 due to student nights doing v cheap drinks and free entry. Was pretty money savvy.

I can see no reason why the almost £5k isn’t more than enough to fund food and everything else, if rent is already paid.

Rents vary so much, from £4k to over £10k. If you add that £5k, some students would have £15k for the year - significantly above the full maintenance loan.

Intersetingly, they say that if the maintenance loan had kept pace with inflation, it would be just over £12k now. That’s why we worked on £12.25k. It has required some budgeting, but not hardship or being excluded from things and as I said DC had money left for a holiday too.

Student finance opened up in April I believe, so if you want to apply for finance, I’d do so quickly. They are normally pretty efficient.

Apply for as much finance as she can get; grants / loans etc. As others have said, it’s more like a tax when you pay it off.

If she’s been living with you, then it will be your income they’d base things off. So she might actually get more.

One finance officer at one Uni I visited as a parent (and he’d previously worked for student finance) said you can choose your “resident household” to be whichever one has the lowest total income. And you can change this each year if you want.

I think actually my DS has terms that are longer than 10 weeks – more like 12 weeks from a rough calculation. I guess it varies. I know my DD (at a different uni) had no summer term at all to speak of, and certainly was all finished and done by assessment deadlines at the start of May; but DS has had exams in mid-June.

@TizerorFizz that's a good point about cheap halls and IMHO worth considering when choosing a uni. Leicester has quite a lot of accommodation at around £100 pw; Loughborough also has halls at about £5k for the year, and there are SC halls at Birmingham for less than £5k. I am sure if you look, other unis have some options too (those are just some I knew about), But I agree that it's not available everywhere, and increasingly unis are building all en-suite accomm at ££££.

Agree, hall costs can vary enormously. Dd is at Bath £££ whereas ds went to Warwick £

Also many places have some cheaper accommodation, but it doesn't mean you will be able to get it.

Apparently there is usually more competition for the en-suite rooms than the basic ones.

@TizerorFizz There are still enough unis that have rooms around around £5-5.5k which isn’t much more than min loan, and is equivalent to a second year house where rent falls within min loan but there are bills on top. Yes, some cities fall outside this price range but you have to narrow down the options one way or another!

Yes you may not get the cheaper halls but in fact IME and that of my DC, they are less popular as smaller rooms, shared bathroom.

Leicester in particular has a big range of cheaper halls and private accom is cheap too (DD paid <£100 pw). I'm not saying it’s a reason to go there (! tho as I have said on other threads I think it is an underrated uni) but it's not unreasonable to bear this in mind in general.

DS2 at Lboro has paid about £5-6k a year for his shared houses and halls were <£5k (cheapest one).

Places like Leeds, Liverpool, Sheffield, Newcastle, Nottingham have decent range of private accommodation at lower prices. Compare to Bath or Bristol - mate of mine is paying £10k pa for their DC's shared house next year in Bristol. Not anywhere fancy (I mean not Clifton or Cotham) either.

@clary my dd is at Nottingham and my ds is hoping to pick up one of Notts/Newcastle/Liverpool/Loughborough in clearing! Or Southampton, which also seems decently priced. I’ve said to Ds, there would have to be a very compelling reason to choose to pay double on accommodation. They’re encouraged to think about value for money now they’re paying so much - this is part of it.

It’s interesting isn’t it, that often the cheaper accommodation is less popular. This is despite the pressures on student finances.

Older, shared bathroom accommodation can often be half the price of the fanciest new accommodation, but students are queuing up for the latter.

I suspect that much of this is that when they start looking in the spring of yr13, they aren’t yet fully au fait with the budget they will have and the range of expenses…..and often parents haven’t considered it fully yet either.

Many families seem to let their kids choose accommodation and then work out the finances around it. So naturally the fancy accommodation appeals and if finances are open ended, that’s what they list. Then the consequence is parents have to contribute more and max available loans taken.

Some families do the calculations up front. They work out what the max loan will be and:or what they will give. They tell the DC and point out that if they choose X accommodation they will have Y Left for other things, but if they go for Z accommodation there will be less. This focuses the student mind to consider if they prefer cheaper accommodation and more left for other things or more expensive accommodation. It becomes an informed choice.

In reality, many students are spending far in excess of the full maintenance loan via loans and parental contribution. It’s not always because there is no alternative, but because families don’t look at the finances fully before choosing accommodation and never really set a budget but give whatever’s requested….and then often lots of extras too. It’s fine and a valid choice. But for some families it makes them far more stretched than they might need to be. But I guess that’s the way with all budgeting.

Very few posters on MN seem able to say what their DC spends per year. On one level, they are independent adults so it’s down to them, but many students also don’t know the cost of their rent or bills or what they’re spending each week.

I think one of the issues with student debt, is once they have it, spending more doesn’t seem an issue…the actual numbers cease to be meaningful and especially when they’re told they probably won’t pay it back.
But with the new loans, far more will be paying it back and not just as young adults but as young parents with childcare costs and even when funding their own kids through uni…with all the compounding interest.

If parents are willing to pay X which takes them well over the full loan, it could be worth taking less if the loan - rather than just expecting to take the max available. I don’t think many consider this.