University ... and debt

megsykins

You mention paying £9k tuition fees. You won't have to pay these until after you graduate, when they will be deducted from your wage packet in the same way as tax and NI and only when you're earning more than £15,000 pa. This is actually a better system than now as we have to pay our fees upfront, at least you will be earning a salary by then!! Currently the loan is re-paid at 9% of your salary. If you never earn over £15k, you don't pay it back. You don't pay real interest on it, so the amount of debt in real terms will not increase.
Also, there is going to be lots more bursaries available to encourage people who would not necessaryily go to Uni otherwise. Currently, the poorest students get £4k plus £1.5k grant (I know this, my housemate gets it). These bursaries will increase and will be widely available.

Also, remember in the long run, student loans are the cheapest form of debt. I know very few students who have debt other than their student loan and student (0%)overdrafts, the large majority avoid credit cards, normal loans, etc and survive on what they've got.
Many work part-time, I work one night a week in a bar, I work 4-12 and so even though I'm only on minimum wage, I earn £40 + tips pw; this funds my luxuries. Most also work their asses off during the summer, most students can easily earn £2.5k+ over the 3/4-month summer.

THIRZAH

Both my daughters have been to university. We had to pay their fees and they only got the minimum loan so it cost us £2000 + a year.. They lived at home during the holidays so their loans only for term time expenses. They both got jobs during the summer holidays and managed to save enough to cover clothes etc for the year.

A lot depends on which university you attend. DD1 went to Durham. She had two years in hall. The situation may have changed but at the time her hall fees included all meals including lunch so she was unable to economise by cutting down on expenditure on food.She didn't have to borrow any more than her student loan but did use up the £1000 or so that she already had in the bank.

DD2 went to Cambridge. She actually spent less during her three years than DD1. She lived in college for all three years. She could cook her own food or eat in the cafeteria.Living in college also meant that she was near lecture theatres etc so didn't have to pay for transport.

Neither daughter had a job during term time- according to DD2 Cambridge really don't approve of students taking any kind of employment during term time but colleges often have hardship funds for poorer students.

johnthomas_2

Save yourself even more by asking yourself whether you actually need to go to university. In recent years more and more colleges and former poly's have now got uni status, and as a result the UK now produces far too many graduates in subjects that have little commercial application, and also devalued the point of earning a degree. As a result many graduates end up in roughly the same job they would have got without a degree, make sure that the degree you are going to study is actually going to get you a job at the end of it which will earn more than what you would be earning anyway. For many years schools and colleges have reeled of the same mantra about uni = more earning potential after graduation, (they get paid for you being there), but i would look at what jobs you are likely to be applying for, be realistic, and dont get carried away by the fact that you will have a degree, so will thousands of other hopefulls!! Spending 3 -4 years at uni, clocking up thousands of pounds worth of debt is not always the best way to go, certainly from my generation of graduates, most of my friends that didnt attend uni but bought a house 10 years ago instead are a lot better off than a lot of my graduate mates. This countrys desire to make further/higher education available to all is great in theory, unfortunately without an economy that needs or can sustain the number of graduates we are producing, a lot of graduates will find that they are no further on with their degree than somebody they work with who didnt go to uni, but has 3 - 4 years real job experience. Try to get some relevant work experience either while studying or during the holidays, there is nothing worse than the Skills/Experience paradox you face as a new graduate who cant get a job without experience and cant get experience without a job. If i had my time again i would have gone travelling for longer, you learn more about the world and yourself.

iglimpse

:eek:

To the first person in the thread, (no name) I know exactly how you feel, as I am in the otherside of the same boat. My daughter is also starting Uni in Sept.

I am terrified of all that this involves. Tuition fees, accomodation etc. We will not be able to help out much (income just above threshold for help with fees). She is keen on leaving home and I would not deny her the opportunity.

I just don't know where to begin, finding out for myself what is involved. I know it is all up to her but I am keen on learning from other people, how to avoid obvious mistakes. The whole UCAS system has fuddled me.

Do I just let her go, and see what debt she comes out with at the end? I would like to be able to avoid any obvious pitfalls. eg, do the tuition fees have to be paid up front.

This is new territory, as the first of the compulsory tuition year. We have never been in debt, forcing my kids into it, gfeel very strange, or am I looking at this the wrong way?

C

Myosin

If you're worried about the debt then don't send her to uni. UNless you see it as an investment, which it is. A family friend's son is doing Medical Biochemistry and uni and they are in the same boat as you, ie same threshold for tuition fees but his attitude is that he's doing a proper course and he KNOWS he's getting a job at the end which will pay off the loan no probs. It's only those doing 'other courses' who worry about debt. It's your call

Myosin

and don't worry about the debt - you'll never get any heavies/goons showing up at your house saying, "Where's our loan payment?". The amount taken is miniscule compared to the salary when earning, not worth worrying about. The debt doesn't affect credit ratings, mortgages, or anything else for that matter. Don't worry!!

zar

johnthomas wrote:

Save yourself even more by asking yourself whether you actually need to go to university... For many years schools and colleges have reeled of the same mantra about uni = more earning potential after graduation, (they get paid for you being there), but i would look at what jobs you are likely to be applying for, be realistic, and dont get carried away by the fact that you will have a degree, so will thousands of other hopefulls!!

Disclaimer: IMO university is wonderful and not about increasing earning potential.

But on monetary grounds, it is indeed not true that you will definitely earn more as a graduate than a non-graduate over your whole lifetime earnings, never mind just in your twenties.

The following quote is taken from a report on higher education funding, Higher Education Funding Policy: Who Wins and Who Loses?" by The Institute for Fiscal Studies, March 2005.

I've only read through it quickly but the statistical methods look good, an improvement on the simplistic assumptions usually used for this kind of thing. The data used was from 1994 to 2002, so remember that there will be more graduates in the future and so the advantage in having a degree will probably diminish rather than increase.

To see the information in graph form (I personally understand things better this way but I'm a statistican so non-statistians may be different!) look at fig 7.3 (male) and 7.4 (female) on pages 50/51 of the pdf, and figs 7.6 and 7.8 on page 53 and 54.

"We estimate the median of the lifetime earnings distribution for male graduates to be
around £325,000 higher than the equivalent figure for male non-graduates. For
women, the lifetime earnings advantage of the median graduate over the median nongraduate
is around £430,000.

However, there is considerable variability in total lifetime earnings across the
population. Indeed, some graduates will earn less than some non-graduates over their
lifetimes. For example, whereas 15% of male graduates will earn less than £900,000
over their lifetimes, 18% of male non-graduates will earn more than this amount.
Similarly, 15% of female graduates are likely to earn less than £500,000 while 16%
of female non-graduates will have lifetime earnings greater than £500,000."


http://www.wb-infokiosk.org/bp.php?url=http://www.ifs.org.uk%2Fcomms%2Fcomm98.pdf

zar

:money: FEMALE? To increase your earnings potential, instead of going to university, why not change sex? This investment could really improve your lifestyle in years to come. The average female non-graduate lifetime earnings are a mere £324,100. You could increase this to £754,100 by going to university, but why not increase your earnings potential to that of a male non-graduate, an incredible £837,000, yes, that's £512,900 more simply by having a small operation - an investment that is far more cost intensive than learning to drive, or even going to university!!!! :money: :j




The figures used in this post are the median and your actual earnings have a 50% chance of being more than this and a 50% chance of being less.

Myosin

hahahahahaha, women are inferior to men :D:D:D:D

angela110660

Eldest is on first year of a four year Uni course and loving it. We applied for and got the basic student loan - which has paid for his accommodation for the year. We agreed to pay his first year's fees for him but up to him in future. He has student bank account with the 0% overdraft facility which he has had to use to get established with books, fees etc. However, he always had a part time job when he lived at home and he has now found one there. He works in a restaurant, has a free meal when he is at work (helps his budget), earns tips which he lives off and puts his wages in bank to offset the overdraft. When he is working he is not spending and he is enjoying the whole experience. Still has more than enough time to go to lectures, do studying, take part in sports activities and go out with his new friends. When he goes food shopping he might buy some bits with other flat mates and they look for the offers. He has even bought some extra clothes in Primark recently - never been known!!
He does not intend to be saddled with debts in the future and will work hard to succeed. Too many students waste their free time racking up debt with no intention of working and the life experience it offers.