Student Funding - Any Ideas?

LizLeonard

My son has just had his uni place confirmed and has to pay course and accomodation costs of circa £6500 p.a. as well as paying for his food etc.

We had decided that he was going to take out the maximum loan and try and fund himself over the next 4 years through a mix of part time work and debt.
We decided this not only because we cannot afford to pay but also because we think it will help him to learn how to control his finances and basically make that transition from a teenager with no responsibilities to an adult .
However my parents have now said they will give him £3,000 a year to help him out. My dilemma is therefore do we give him the money and undermine our original idea or invest the money without him knowing and give it all to him when he garduates to help clear his debt? Or has anyone any other great ideas out there?

Snow_Angel

First of all - congrats to your son :T . Glad he got his chosen place.

As to your other dilemma - tricky!....I think it would be wrong to keep the money from him as your parents obviously want him to have it, and that would be undermining their decision. They just want to see him do well and not have to struggle.

I'd say there were a few options :
1. Don't physically give the money to him. Use it to pay his tuition fees each year, and perhaps give the rest in installments to him each month/term to pay towards his rent.
2. As the 3 years go by, he will need more and more time to concentrate on his studies. With most courses the first year is relatively easy and the grades don't actually count towards your final degree grade. Maybe then he can work part-time more in his 1st year, less in his 2nd year and not at all/very little in his final year. therefore, maybe it's worth putting his first £3000 installment into an ISA or something like that? (I'm sure the pure money section on here would have better advice on that!)
3. Is he a sensible guy? Or will it all go on beer if you give it to him at the beginning of term? Some students are much better at budgeting than others! maybe give it to him in installments once a month/week. If he's staying in halls in the first year, obviously all bills etc are included. next year when he has to pay gas, electricity, phone, internet etc! he'll get a short, sharp shock and a quick lesson in how to budget! Again, in this case it may be better to keep the money and when he has a bill give the money to him that way.
4. Talk to him about it - ask what he wants to do, tell him your concerns, introduce him to this website!

That's just a few ideas - I'm sure people will come up with more.

Good luck to you and best wishes for your son at uni this year.

jitsuguy

I would speak to your parents about the money and see if they don't mind investing it for him for the end of his course when he graduates. As it will be most welcome then.

This is mainly from experience. If the money was given to me during the course I wouldn't know where it has gone as it would mainly go on going out. Plus I will guarantee your son will spend somewhere in the region of 200-400 in the first two weeks just going out and meeting people!

Plus if you look at your account and see that you don't really have much you will always budget subconsciously. Whereas if you know you have a lot of money coming in then you just end up spending more.

Jitsuguy

kittiwoz

I'd say give him the money. If he has to pay his own accomodation and course fees he will still have to manage it carefully but it would mean he wouldn't have to do so much part time work and could avoid debt other than interest free overdraught and student loan. Student loan payments are pased on an expectation that parents will provide additional financial support and are not liveable without it. If you are worried about his money management skills pay him the money as a monthly or weekly allowance.

skippie

Why invest the money? The interest your son would inccure on his loans would more than wipe out any interest you earnt on the £3k, certanly if you invested securely I'd have thought.

What about applying for burseries and extra grants, if your family is applicable?

cupid_s

I was lucky during my degree that the tuition fees we're only £1000 and i didn't have to pay them anyway as both my parents are retired.
However there's still accommodation of between 2 and 3k a year, books, food, bills etc.
My nan said she'd give me some money each year. This went into an account that my mom had control of. Just before my rent was to be paid she'd put that amount in. She'd buy my train tickets home and books and then put in some money each week for food until it was all gone.
I worked in the first year but after that my degree would have suffered enormously if i'd worked. If your son is going to end up with almost 30k debt after going to uni i bet he damn well wants to make sure he gets a decent grade at the end of it. And for a lot of people it's just not possible to do as well as you can when you have to work a lot.
The tutors on my course virtully begged some of my friends to give up their jobs because they could tell their grades were suffering.
Another thing, I wanted to work hard not just for myself but because my nan was putting a lot of money into my education. I didn't want to disappoint her so worked even harder.
I would never have dreamt of spending that money on anything it wasn't directly meant for. I certainly very rarely went out. I saved money from working in the holidays and this was my going out/clothing/any extras money. The fact that i was given money to help me at uni didn't make me not moneywise, hence me being on here.
I am sure that your son will need most of his loan and money from your parents to help him through.