Parents paying Student Loans

cordial

Is anyone else in this position? I don't know what to do for the best.

Along with spouse, I have promised to take responsibility for my two children's Student Loans Company debt.

They have been out of university for about 3 years now and we have simply been paying off the interest so that the amounts still stand at the level which existed at the time they left... about £15,000 each.

Neither of them shows much sign of wanting the nine-to-five life or of being likely to trigger the threshold for payment with any employer. The best description is 'low-earning, self-employed'. Of course, this COULD change someday.

Our interest-paying strategy was decided on for lack of any better idea but it still involves a payment of some £800/year at current rates.

Has anyone any advice to offer?

clarab_3

I've not long finished paying my student loan but im embarrassed to say im not sure of the interest rate any more.

I am prepared to guess you could get a savings account with a higher interest rate than that on the loan - given that these loans don HAVE to be paid until criteria are met by your kids would it be better to save the money in a high interest account? You should be able to put less in and make the interest work - if your kids NEVER reach the threshold to pay - you have a nice (and well deserved) nest egg for your trouble.

PS. your kids have no idea how lucky they are... I hope they appreciate it.

mountainofdebt

cordial wrote:

.

Neither of them shows much sign of wanting the nine-to-five life or of being likely to trigger the threshold for payment with any employer. The best description is 'low-earning, self-employed'. Of course, this COULD change someday.

Yes stop making payments.

Otherwise how are your children ever going to be given the incentive to grow up?

GunJack

Also, if they are earning below the income threshold, they should be deferring their payments anyway. Mrs GunJack has been out of college now for must be 12 yrs, and has never earned enough to actually pay it back. Or have these rules changed for more recent students ???

Make them take the responsibility for the debts they've run up, else they'll never learn......

Bossyboots

Agree with the others.

py6km

I agree with the others too. I left uni with lots of debt, there was simply no other way for me to be there, but I have paid it off. Even if my parents could have afforded to pay it for me, I wouldn't have expected them to or wanted them to.

If they earn less than the cut off, they should defer. If they earn more than the cut off, they should be paying for them. I really don't think you should be paying them for them.

a&akay

We paid our two boys the full student allowance. They then proceded to take out the full student loan and live the life of Reilly on both sets of 'income'. The eldest is now struggling to raise the necessary funds for the deposit on a house (he's renting). Lesson learnt. With our two girls about, hopefully, to go to Uni the deal is we will give them the full parental contribution but they will also take out the full student loans including fees. We will save the equivalent of the loans in ISAs or similar in their names to which only we will know the online passwords. This will be released to them when they want a house deposit. No Italian type sponging in our house!

Smashing

Their debt, their responsibility.
Stop making payments and start saving for yourself.