Uni maintenance loan

[imtiredandiwanttogotobed]

DD has recently started uni. She is living st home so hasn’t taken out the maintenance loan.

Should she get the maintenance loan anyway for this year so she can put it into an isa to have some money set aside for when she finishes uni?

I can’t work out if it’s better to have less debt or use the money to save as it will likely be a while before she had to pay it off and even then minimal cost. She would save the money for a house deposit.

I advised ours to take out the loan and invest it. Obviously it is their choice, and depends on their will-power too as some might just spend it.

I figured this way it gives them options. So long as they are getting at least the loan interest rate back from the investment, they could at any time change their mind and pay it back.

I thought the interest on new loans now was so high they wouldn’t be able to make the loan interest back? 6%?

In the past yes - take the loan and invest it. Nowadays I wouldn't as the interest rate is so high AND the interest starts accruing from the date you take it out rather than when you graduate which used to be the case. Interest rate is currently at 4.1%.

Dont take it!! Its very hard to "make money" by borrowing & investing, the interest rates stop you.

God no!
get a part time job and save that money up!

Thanks for your replies. I think I was thinking if she will be paying back her fees for the course and that’s going up and she is unlikely to pay it off does it even matter having more debt cos the amount she pays will be the same?

I am generally averse to any kind of debt so my gut is for her to not take on more than she needs but I just wondered if she was missing a trick by not taking it out and having the money there to use for a house or similar? Rather than making money on the money if you see what I mean?

Current interest applied to loan 4.1%
Best buy 1 year fixed rate ISA or bond 5%
So no issue taking the loan and she should make a small profit. If the numbers reverse she can always pay it back.

Remember the goverment adds 25% to a LISA

25% added but also a 25% penalty if the money is taken early. LISA interest rates are generally a bit lower too.