Student loan alternatives?

jodyapple

Thanks to everyone for the advice.

Just a few general responses to some questions asked.

With reagrds to the student loan company, I've found them really unhelpful. They were a year late in taking out my payments, and when I asked how much of my loan I would have paid back (not just the interest) for that year - it was caculated as a grand total of £10. So I'm sure you can understand that if there is any way she can get by without getting tied into this - I'd reather she didn't. (The rate is variable and I make between £8 and £40 a month interest.)

Grad wages are crap to begin with, so to have anymore than the amount that comes out at the moment would leave me short. Again - I want her to feel the benefit of uni, not feel she was duped financially.

Thanks fo the info on external funding and scholarships. I'm seriously thinking of advising her to defer her place just one year, then for her to work and save before she goes.


It is all really good advice - but at 18, she's not exactly got life's priorities in order yet. It is going to be so hard for her to not want to keep up with everyone else and go out all the time, buy the latest clothes and get into debt. I think it's asking a lot of an 18 year old to show the level of self disciplin in such a temtpting situation with everyone around her egging her on to do anything but save. I suppose it's down to her in the end!

Stevenj214

jodyapple wrote:

Grad wages are crap to begin with, so to have anymore than the amount that comes out at the moment would leave me short. Again - I want her to feel the benefit of uni, not feel she was duped financially.

Thanks fo the info on external funding and scholarships. I'm seriously thinking of advising her to defer her place just one year, then for her to work and save before she goes.

The benefit of uni is that you can get a grad job though and earn, on average, a higher wage than non graduates throughout your working life. Plus the whole 'uni experience' can be wonderful.

Student loan rates have had APRs of 2.5%-3.5% in recent years, which is at or slightly above inflation. Also it only gets automatically paid if your salary exceeds £15000pa at 9% on the excess (so if you earn £16000 one year, you pay £180).

So whilst yes, technically, it's still a debt - personally I cannot group it together with commercial loans and credit cards because it's never going to leave you short of cash.

On the part about advising her to take a year out to work and save - 1) with no previous qualifications or experience, she'll be looking at a dead end job with low wages, and 2) what makes you think she'll save? if your opinion is that at 18 years old she is still too young to budget and manage her debt, then encouraging her to actually earn money which she will feel she has a right to spend might have an even more detrimental effect.

If she wants to go to uni, I feel you should simply encourage her and pass on small money saving tips and advice.

Do you really think that having a low rate loan which only gets paid when you earn decent money as a good enough reason not to go to uni?

sophlowe45

if you were going to take a year out before starting uni, i really don't think its worth it for a crap one year job!! However, if she was to work for a big company, i.e. Deloitte etc. who have specific work plans for GAP year students, then they sponsor you through uni, you get internships over the summer holidays instead of crappy jobs and you're guaranteed a graduate job with good money and excellent career prospects.

I'm only using Deloitte as an example as i have friends who did this scheme with them, there are plenty of other companies who offer similar GAP year placements and help at uni, and a job afterwards.

Also, it helps you mature as a person...

also, fees may be £3000 a year, but you get upto £2700 paid for you by the government...

part-time job during term-time: if you're an Arts student its fine, but Engineering, Science degrees, Economics etc. are very time-consuming and you don't want to do badly in your degree due to working too much...

jodyapple

Stevenj214 wrote:

The benefit of uni is that you can get a grad job though and earn, on average, a higher wage than non graduates throughout your working life. Plus the whole 'uni experience' can be wonderful.

Student loan rates have had APRs of 2.5%-3.5% in recent years, which is at or slightly above inflation. Also it only gets automatically paid if your salary exceeds £15000pa at 9% on the excess (so if you earn £16000 one year, you pay £180).

So whilst yes, technically, it's still a debt - personally I cannot group it together with commercial loans and credit cards because it's never going to leave you short of cash.

On the part about advising her to take a year out to work and save - 1) with no previous qualifications or experience, she'll be looking at a dead end job with low wages, and 2) what makes you think she'll save? if your opinion is that at 18 years old she is still too young to budget and manage her debt, then encouraging her to actually earn money which she will feel she has a right to spend might have an even more detrimental effect.

If she wants to go to uni, I feel you should simply encourage her and pass on small money saving tips and advice.

Do you really think that having a low rate loan which only gets paid when you earn decent money as a good enough reason not to go to uni?

I understand your point and agree that she should go, but you seem to think that I'm trying to put her off which isn't the case. (and the downside of forums rather than face to face chat is that wires get crossed lol)

If she gets a job in a local call centre, she can earn about £7 an hour with her current quals and work experience (she's always had a part time job since she was 13). Because she will still be living at home, she won't have any outgoings and won't be embarking on a uni lifestyle of going out more than she is staying in... She is more likely to put money away as she has a goal to work towards... Plus her mum and I are at hand to remind her to save lol. However this is just one option for her to consider and would mean her arriving at uni with a few thousand pounds to tide her over rather than nothing.

As for graduate wages, It really depends on the industry. I chose advertising and as it is so competitive the pay is pants till you reach account manager level up north. Of course this will increase eventually, but unfortunately it's not as quick as house prices are rising grrr. So it depends on what she wants to do. she is considering P.E teaching which looks like a good move with lots of post uni benefits.


Of course I don't think having a low rate loan is a good enough reason not to go to uni - otherwise I wouldn't have gone myself! I'm simply looking at any possible better options for her so she emerges the other side in the best possible financial position and learns from my mistakes rather than her own. If the Student loan is the best option, then that's that, but we wanted to check to be 100% sure first as I have had so many problems with them. From all the responses, it looks like the best route to take.

Without going into our personal situation, her going to uni right now is going to be very hard for her mum and her - it's a bit complicated and means she may not get government help due to there being a grey area on the total of her parents earnings. Of course I am going to encourage her to go, I just want her to get the most possible out of it so it's a fantastic experience rather than a constant struggle.

Many thanks for the advice though, and to Soph, I'll get her to look into that. I think if she takes into consideration bits from everyone's post, she will be able to make an informed (and hopefully) mature choice. :T Thanks again!

Stevenj214

jodyapple wrote:

If she gets a job in a local call centre, she can earn about £7 an hour

One point on this - have you ever worked in a call center? I worked full time in one for Sky last year for 3 months, and to be bluntly honest it was soul destroying. As a means to an end, I could possibly do it again part time or during the holidays - but only as a very last resort job. There is a reason they pay £7p/h, and even at that they still have astronomically high staff turnover levels.

jodyapple

Stevenj214 wrote:

One point on this - have you ever worked in a call center? I worked full time in one for Sky last year for 3 months, and to be bluntly honest it was soul destroying. As a means to an end, I could possibly do it again part time or during the holidays - but only as a very last resort job. There is a reason they pay £7p/h, and even at that they still have astronomically high staff turnover levels.

Yes, I worked for the AA for 5 nights a week for nearly 4 years in a call centre and also Norwich union whilst at uni. It wasn't my fave job, but it was cushy for what I needed it for as I lived on my own whilst at 6th form college so it paid the rent and bills. It was an example anyhow, with the amount of work experience under her belt - she's not likely to struggle finding something if she decides to defer for a year. But we are going to sit down next week and look into every one's suggestions and see which ones will suit her personal situation.