student son and how to pay back student loan?

[spiritinthesky]

my son is graduating this year.he has had the maximum student loan,and has been very, very frugal,and is probably going to leave uni with about £2000 in his account.He has no job linedup so far, and will probabbly have to sign on as soon as he graduates,hopefully not for too long, but you dont know how long of course. My question is,should he put that money to pay back some of his loan? and how do you do that? will it affect his signing on? or should he try and save it, bearing in mind he may not get a well paid job for quite some time ,if ever.Or should he use it for train fares to interviews,and buying a suit etc?
He will be coming home to live for now,and we are v.low income,so wont be able to support him financially.Me and husband lack the money making and success gene,so I feel hopeless about offering career advice.

Savings of £2k don't affect JSA as far as I know.

He'll only pay back the student loan once he's in a job and earning over a certain amount (£15k I think?) - then it's taken automatically from his pay. Think of it like a tax.

Have a look on the moneysavingexpert website. They are always recommending that you don't pay back your student loan if you have extra money to do so, as it's the cheapest form of borrowing you'll ever have in your life.

Having a student loan will only affect your son if he comes to apply for a mortgage and even then, it won't affect him that much.

I think if I were him, I'd save the money.

thanks for that advice. I will pass it on to him.Yes everything I will be asking for some bed and board! thanks again all.

I have still have my student loans to pay back, I have had them for 15 years!!!

I have never earnt anywhere near the amount they quoted (which for me as I was on the old loans system is about £24K)

It has not for me gone against any mortgage (joint with DH) or credit card etc as it is strangley not classed as a debt. I am a SAHM and will be for the furture so I am just waiting for it to be written off

Thi may be different with the new loans that came in several years ago.

I second everythingiseverthing and would tell him to keep that money in his bank, he will need new clothes for any job he takes and will need to support himself for the first month until he gets paid. So that would cover lunches, travelling to work etc.

I agree about charging him board. I came home after uni and paid for my food, but I wasn't so fortunate as to come home with money in the bank although I did live frugrally.

One other suggestion - I don't know what your circumstances are - but if you can afford it you could put the cash he gives you for board into a separate account (an ISA if you don't already have one perhaps) and then when he does move out you can give it to him as a lump sum of money for a deposit on a house or for a car or bicycle or wedding or whatever is needed at that point.

My parents did this for my sister when she moved back in with them and it's a good way to give your child a financial boost when they need it.

(If he's not good with money - though it sounds like he is, you could also keep it as a surprise).