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    • copperclock
    • By copperclock 8th Oct 17, 5:19 PM
    • 200Posts
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    copperclock
    Lie about student loan and 'living elsewhere'?
    • #1
    • 8th Oct 17, 5:19 PM
    Lie about student loan and 'living elsewhere'? 8th Oct 17 at 5:19 PM
    Hello.

    My DS lives with me and his step-dad. We have a fairly high household income. Therefore, when the time comes, DS will only be entitled to apply for the minimum maintenance element of the student loan.

    His father and step-mother have a lower income. His father has suggested that he apply for student finance under his address so that he can get a larger maintenance loan. He wouldn't actually be living there.

    Please tell me why this is a good/bad idea. My hunch is that it's bad.
    Last edited by copperclock; 08-10-2017 at 5:32 PM.
Page 1
    • Keep pedalling
    • By Keep pedalling 8th Oct 17, 5:32 PM
    • 3,752 Posts
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    Keep pedalling
    • #2
    • 8th Oct 17, 5:32 PM
    • #2
    • 8th Oct 17, 5:32 PM
    It's bad because it is fraud and could land you in a whole heap of trouble.
    • Pollycat
    • By Pollycat 8th Oct 17, 5:50 PM
    • 18,023 Posts
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    Pollycat
    • #3
    • 8th Oct 17, 5:50 PM
    • #3
    • 8th Oct 17, 5:50 PM
    It's bad because it is fraud and could land you in a whole heap of trouble.
    Originally posted by Keep pedalling
    And should do if the 2 parents and 2 step-parents go ahead with this
    • jackieblack
    • By jackieblack 8th Oct 17, 6:19 PM
    • 7,166 Posts
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    jackieblack
    • #4
    • 8th Oct 17, 6:19 PM
    • #4
    • 8th Oct 17, 6:19 PM
    I do know someone who moved in with their lower income parent just before making their student loan application.
    Moved back in with the other parent as soon as they finished their course.
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    • Spendless
    • By Spendless 8th Oct 17, 6:35 PM
    • 19,570 Posts
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    Spendless
    • #5
    • 8th Oct 17, 6:35 PM
    • #5
    • 8th Oct 17, 6:35 PM
    There's a similar question on the student board at the minute. In this case asked by the step-Mum in question. Posted below for info.

    http://forums.moneysavingexpert.com/showthread.php?t=5722596


    If your son was to live with his Dad, then the amount borrowed would be on the household income there (ie Dad's and step Mums). I have no idea on whether he needs to have been living there for so long before being eligible.
    • copperclock
    • By copperclock 8th Oct 17, 7:28 PM
    • 200 Posts
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    copperclock
    • #6
    • 8th Oct 17, 7:28 PM
    • #6
    • 8th Oct 17, 7:28 PM
    And should do if the 2 parents and 2 step-parents go ahead with this
    Originally posted by Pollycat
    I tend to agree. It doesn't feel right to me either.

    I do know someone who moved in with their lower income parent just before making their student loan application.
    Moved back in with the other parent as soon as they finished their course.
    Originally posted by jackieblack
    I'm going to assume that they didn't actually move??

    There's a similar question on the student board at the minute. In this case asked by the step-Mum in question. Posted below for info.

    http://forums.moneysavingexpert.com/showthread.php?t=5722596


    If your son was to live with his Dad, then the amount borrowed would be on the household income there (ie Dad's and step Mums). I have no idea on whether he needs to have been living there for so long before being eligible.
    Originally posted by Spendless
    Thank you. That other thread is really helpful. I hadn't thought about the electoral roll/credit file issue it could present for him.
    • copperclock
    • By copperclock 8th Oct 17, 7:30 PM
    • 200 Posts
    • 236 Thanks
    copperclock
    • #7
    • 8th Oct 17, 7:30 PM
    • #7
    • 8th Oct 17, 7:30 PM
    It's bad because it is fraud and could land you in a whole heap of trouble.
    Originally posted by Keep pedalling
    Thanks. I wonder how often it does happen.
    • mark5
    • By mark5 8th Oct 17, 7:53 PM
    • 1,191 Posts
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    mark5
    • #8
    • 8th Oct 17, 7:53 PM
    • #8
    • 8th Oct 17, 7:53 PM
    If one parent has claimed child benefit/received child maintenance right up to this point wouldn't this be an alarm bell that something isn't right?
    • trailingspouse
    • By trailingspouse 9th Oct 17, 9:35 AM
    • 2,256 Posts
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    trailingspouse
    • #9
    • 9th Oct 17, 9:35 AM
    • #9
    • 9th Oct 17, 9:35 AM
    When my husband's kids were off to uni, they were living with their Mum, who was on a low income. My OH was well paid, so his income was taken into account (which, frankly, I think is fair enough). But my income also had to be declared. We were living together, but not married, at the time.
    • copperclock
    • By copperclock 9th Oct 17, 10:13 AM
    • 200 Posts
    • 236 Thanks
    copperclock
    When my husband's kids were off to uni, they were living with their Mum, who was on a low income. My OH was well paid, so his income was taken into account (which, frankly, I think is fair enough). But my income also had to be declared. We were living together, but not married, at the time.
    Originally posted by trailingspouse
    I think at the moment they only take into account the income of the household where the student normally lives.

    I don't think it's quite fair that the government presume that the step-parent of a young adult will contribute towards their uni living costs (although in our case he is happy to).
    • maman
    • By maman 9th Oct 17, 12:49 PM
    • 16,866 Posts
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    maman
    It's bad because it is fraud and could land you in a whole heap of trouble.
    Originally posted by Keep pedalling

    Thanks. I wonder how often it does happen.
    Originally posted by copperclock

    Not sure how to read this.


    Do you mean how often is fraud committed or how often are checks made to estimate the chances of getting away with it?
    • andydownes123
    • By andydownes123 9th Oct 17, 12:53 PM
    • 92 Posts
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    andydownes123
    You'd probably get away with it but why go all that way to saddle your DS with more debt. If you can afford it (you say you have a high enough income), shouldn't you help out on accomodation costs etc....give DS a better start in the working world?
    • ska lover
    • By ska lover 9th Oct 17, 1:01 PM
    • 2,484 Posts
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    ska lover
    OP I can see why you would be tempted due to the finances but think about what you are doing - you will be boosting your own finances today in order to drop your son in the poo later on


    If he is only able to get the basic element, as you know, the expectation is on you to financially top him up...and thus your household income will come down. Your spare cash will go on his necessities


    If you go ahead with this plan OP, the only person to benefit would be YOU. As by cheating it, your son gets a higher loan and the expectation will not be on you to help out as much financially


    So you get off scot free, and he ends up in more debt


    If it were me and I genuinely had a decent income, I would rather support my lad through Uni than leave him in debt where I could have helped out
    Blah blah blah.
    • copperclock
    • By copperclock 9th Oct 17, 1:22 PM
    • 200 Posts
    • 236 Thanks
    copperclock
    OP I can see why you would be tempted due to the finances but think about what you are doing - you will be boosting your own finances today in order to drop your son in the poo later on


    If he is only able to get the basic element, as you know, the expectation is on you to financially top him up...and thus your household income will come down. Your spare cash will go on his necessities


    If you go ahead with this plan OP, the only person to benefit would be YOU. As by cheating it, your son gets a higher loan and the expectation will not be on you to help out as much financially


    So you get off scot free, and he ends up in more debt


    If it were me and I genuinely had a decent income, I would rather support my lad through Uni than leave him in debt where I could have helped out
    Originally posted by ska lover
    Yes, I think you're right. He might well be one of those people who never actually earns enough to fully pay off his student loan (there are many) but hopefully he'll have a high wage and if that's the case then the size of his initial loan will make a difference to his life going forward.

    My OH and I spoke last night about how, ultimately, it will be us benefiting if we were to do this and that we'd rather do the right thing and contribute ourselves. Our income isn't massive - it'll mean making adjustments and tightening belts - but that's what you have to do, isn't it.

    This whole 'idea' hadn't occurred to us at all when DS's father suggested it out of the blue yesterday. I guess I was just looking for reasons why I should say 'no' (as is my instinct) or to find out if it's a thing that people do all the time (like saying your kid lives at Grandma's to get into a school catchment or something).
    • copperclock
    • By copperclock 9th Oct 17, 1:23 PM
    • 200 Posts
    • 236 Thanks
    copperclock
    Not sure how to read this.


    Do you mean how often is fraud committed or how often are checks made to estimate the chances of getting away with it?
    Originally posted by maman
    Sorry. I meant how often is this kind of thing done.
    • Malthusian
    • By Malthusian 9th Oct 17, 3:49 PM
    • 3,077 Posts
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    Malthusian
    I guess I was just looking for reasons why I should say 'no' (as is my instinct) or to find out if it's a thing that people do all the time (like saying your kid lives at Grandma's to get into a school catchment or something).
    Originally posted by copperclock
    If people say their kid lives at Grandma's all the time to get them into schools then that's news to me.

    To answer the main question, I doubt this sort of thing goes on that often, simply because it's a debt and in theory you have to pay it back. So you don't actually gain anything by lying.

    It used to be common to take the maximum student loan and stick it into a bank account, so in theory you could have raised your return, but with interest rates now much higher (and cash rates lower) that's no longer appealing. If you knew your child wasn't ever going to earn enough to pay the debt back then it would be free money, but to plan on that basis would take a startling lack of confidence in their earning ability.
    Last edited by Malthusian; 09-10-2017 at 3:54 PM.
    • 5MeoDmt
    • By 5MeoDmt 9th Oct 17, 4:21 PM
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    5MeoDmt
    It's bad because it is fraud and could land you in a whole heap of trouble.
    Originally posted by Keep pedalling
    This

    • Cakeguts
    • By Cakeguts 9th Oct 17, 4:23 PM
    • 2,854 Posts
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    Cakeguts
    You can get a rough idea of whether someone will earn enough to pay off a student loan by which university they are going to. If it is a Russel Group or somewhere like Oxford or Cambridge then the odds are in favour of earning enough to pay the loan back. If it is an ex polytechnic, ex technical college, ex teacher training college, ex art college or any of the other ex institutions that have changed their names to universities then the chances of earning enough to pay the loan back are reduced a lot. You can find out what a university used to be if in doubt by looking it up on wikipedia.
    • Zeni
    • By Zeni 9th Oct 17, 5:28 PM
    • 327 Posts
    • 642 Thanks
    Zeni
    You can get a rough idea of whether someone will earn enough to pay off a student loan by which university they are going to. If it is a Russel Group or somewhere like Oxford or Cambridge then the odds are in favour of earning enough to pay the loan back. If it is an ex polytechnic, ex technical college, ex teacher training college, ex art college or any of the other ex institutions that have changed their names to universities then the chances of earning enough to pay the loan back are reduced a lot. You can find out what a university used to be if in doubt by looking it up on wikipedia.
    Originally posted by Cakeguts
    I would say that's subjective though as it depends just as much on the subject they are taking. I attended two Russel universities, one undergrad one post grad and my job (teaching) doesnt pay back a huge load of my debt however my relative who attended a non russel uni doing a lucrative subject paid back his student loan very quickly.
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    • copperclock
    • By copperclock 9th Oct 17, 7:19 PM
    • 200 Posts
    • 236 Thanks
    copperclock
    If people say their kid lives at Grandma's all the time to get them into schools then that's news to me.

    To answer the main question, I doubt this sort of thing goes on that often, simply because it's a debt and in theory you have to pay it back. So you don't actually gain anything by lying.

    It used to be common to take the maximum student loan and stick it into a bank account, so in theory you could have raised your return, but with interest rates now much higher (and cash rates lower) that's no longer appealing. If you knew your child wasn't ever going to earn enough to pay the debt back then it would be free money, but to plan on that basis would take a startling lack of confidence in their earning ability.
    Originally posted by Malthusian
    Not necessarily. Martin has done some calculations here (section five) and, although graduates start repaying on everything they earn above £25k, in order to repay the entire debt before it's written off (after 30 years) the graduate would have to have a starting salary of around £40k.

    These debts go on for most of their working lives these days. Often they never get entirely paid back. This is why Martin says it should be viewed more as a tax than a debt because it's not about how much the loan is, it's more about how much comes out of your pay packet for most - if not all - of your working life.

    Oh, I've never done the school catchment thing, but I know people who have.
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