Real life MMD: Should youngest get more?

CazGreg

Firstly - that's astonishing that you would even do that - and also poor financial sense, see below. I was better off than ever before at university, due to all the grants and bursaries available - and as I was at Oxford, costs were extremely high AND you weren't allowed to take a job. I had no help from my parents at all (they are too poor) and no savings. Yes, I do now have a massive debt BUT....

....Using available money to repay student loans is very, very poor financial management! The interest is minuscule. The repayments are minuscule. You would have a much better return by putting such money into a high-return savings scheme. Frankly, my student debt just sits there in the background and does not impede my life at all - I'm barely aware of it. There really is no advantage to paying off student loans early, the conditions of student loans mean that they are by FAR the most generous and helpful way to borrow money.

If the children are ever going to have to borrow money for anything else - will they be getting a car where they repay monthly? will they get a mortgage? -then helping them with these things is a far, far better use of the money. Mortgage interest, interest on a car purchase, credit cards - all these things cost WAY WAY more per pound than a student loan does!

Saetana

Paying off some of their student loans is a real waste of the money, as others have said its not exactly an onerous debt, I owe 5 figures myself from a foray back into education around 10 years ago but as I'm not working I don't pay anything and even when I have been earning enough to have to pay some back its been a few pounds out of my wages, nothing drastic. The interest rate is very low and as everything is deducted automatically there is no danger of debt collectors knocking on the door or them getting into any trouble whilst paying back their loans. I would invest the money you have put aside for them and keep it until they need a helping hand with something more important such as a house deposit or to help buy a car, paying off part of their loans is pointless.

Also, as others have said, going to university is a choice and parents are not liable in any way for the choices their children make as adults at 18+, don't let your kids think that you will always bail them out if they are in financial trouble, its not good for them and doesn't help them learn to manage their own money. Student loans are not the same as ordinary loans, paying them off early is using money that could be better spent on more immediate needs and concerns.

CLGoggin

When I went to uni, my parents helped with what they could - they initially paid my tuition fees and then, when my mum got a pay rise, also helped towards my rent. I think if you make the comparisons of what has actually been provided for each child, then the money given to each doesn't need to be such a big issue.

My sister didn't go to university and lived at home for a couple of years post 18. She felt it was very unfair that she had to pay rent, whilst my parents paid my rent at uni. However, since then, she has had things were she really needed financial help and they have helped her with specific things. For example, she couldn't afford a car but needed one for a new job so my parents offered to match whatever she could save so she could buy a decent(ish) car rather than something that would break down all the time.

If you are helping your children financially with specific things and, at the same time, teaching them the value of money and lessons in budgeting etc then I'm (at least in the long run) they will appreciate the help and not play the comparison game. Many people do not have parents that can even consider helping them out in such a way!

Also, worth considering how sensible the children are...my brother-in-law inherited ~£15k in January and in his first year of uni. He has already spent most of it and has little to show for it and will still come out of uni with massive debt. I believe in helping family out but sometimes being left to fend for themselves is probably the healthiest way for them to learn!!!

diana_simpson

It all depends how things work out. Both my sons had £9000 loans, but neither of them earns enough to pay anything back at present. I consider student loans like a tax, which has to be paid once you earn enough, in recognition of the contribution of your degree. Your children may end up with different wages then you will need to ask should you give them different amounts because of that? It is my understanding that loans simply continue for a set amount of time and if neither earns over a set amount then none of it has to be paid back, so therefore not fair to give one more than the other!

silvercar

If the children are ever going to have to borrow money for anything else - will they be getting a car where they repay monthly? will they get a mortgage? -then helping them with these things is a far, far better use of the money. Mortgage interest, interest on a car purchase, credit cards - all these things cost WAY WAY more per pound than a student loan does!

If they got a mortgage then you would have to give each child the same amount to be fair.

But these student tuition fees are not fair, and now starting out in life saddled with this debt - that will take 9% of their income above 21k for a very long time, is a burden.

Jillyboos

I would wait and see. I certainly wouldn't pay off their debt, it is the cheapest one they will ever have and let's face it they are not going to go through life debt free. Far better to help them onto the property ladder when the time is right. My son graduated in the summer and will not be earning sufficient in next tax year to make any repayments (he is now self-funding a second degree - so not in a graduate role). I am holding onto my money to help when really needed. When he eventually starts paying back if it has significant impact I shall be transferring that amount of money into his account each month.

Ebenezer_Screwj

I wouldn’t be throwing any money anywhere at what is frankly a con-trick perpetuated upon an innocent generation, which will one day become the lost generation of the 21st century.
Polytechnics have been rebranded as “universities” and “certificates of having attended a course” have been rebranded as “degrees” in a sleight of hand trick which doesn’t fool prospective employers and leaves “graduating”students just as ignorant as on the day they first attended these places.
All this in the cause of levelling down, under the false belief that all young people are of equal academic potential - and indeed inclination.

d577ta

To do it fair pay off the same percentage of each loan.

I.e. pay off 40% of each

40% of 27 = 10.8
40% of 7 = 2.8

27-10.8 = 16.2 grand of debt left
7-2.8 - 4.2 grand of debt left

its the fairest way to do it

TBagpuss

I would wait and see.
I think the key is to treat the children fairly,which isn't necessarily equally. I'm one of 4 children - we all went to unverity, and my parents supported all of us in different ways - when my eldest sister went, she got a grant, and laons haden't ben invesnted yet. I got a tiny grant and a smallish loan, my youngest sib had a full loan. Then there wee toher differences (one person did a post-grad course - necessary for their career, but expensive) another chose a longer course, which was not 'essential', and we have all different incomes since graduating. I went to uni in a cheap city (huge stedent population, lots of discounts and deals, surplus of housing so low rents) My sister went to a small, specialist college in an expensive town, etc.

In purely finacial terms, I have no doubt that my parents have given more to both my younger brother and my older sister than to me, and more to me than to my younger sister - but I don't feel it is remotely unfair, and I have never heard anythingto suggest any of the others do either - each of us got support and help at the time we needed it.

I would be inclined to hold on to the money for now (after all, you may need it yourself!) and help each of them out as and when needed.

For instance, their needs may differ depending on where they end up living and what jobs they get - if the elder child has higher repayments then that may have a bigger impact on ability to get/afford a mortgage, even though the debt is lower in total. If one of them ends up in lower paid work then they may need more help even if they don't have to start paying back their debt.

Whatever you chose yo do, do make it clear to the children that it is your money, and that you are helping each of them in accordance with what you can afford, and what they seem to need, not on whether you value one of them more than the other.

jedley_2

you shouldnt give any of them anything , you had to earn your money let them do the same. i would suggest a world trip for yourself and partner get away from all the cadging, let them earn their own money , we are breeding a nation of spongers always on the bum from their parents.
the cook islands are lovely, and they are a long way from whingeing kids!!!!!!!