'Don't pay your kids tuition fees upfront' Discussion Area

kayr_2

setmefree2 wrote: »

I assumed that they were only really interested in the opinions of the large consumer protection groups like Which? MSE etc rather than individuals....

I could have been wrong however

I like to think that individuals who actually do bother to respond/contact MPs are seen as representing a groundswell of public opinion but maybe I'm deluded. Can't do any harm to express your opinion if they are asking for it can it?
I was told years ago by a campaigning group that an MP would consider changing the way they voted on an issue if they received 50 letters from constituents about it, as that represented enough voters to mean they might be in trouble at the next election!

worried62

The £10,000 is not my only pot of money. I think I now agree that it is not wise to pay the fees up front.

I agree that the loan will be a stretch to live on - but I had already gifted small sums to my son from birth, that now amount to about £6,000 to help him through University. He can also continue with his part time job in University holidays which will help.

I am now of the opinion that I might be better using the £10,000 towards a deposit on a flat/house on a buy to let for my son to live in for the last three years of his course.

Squibbler

Okay, well I am totally confused by this whole thing. My son is hoping to study medicine. Does that make him scenario 3? I have no idea. I don't know what a junior doctor gets paid. I know his course will be 5/6 years long, but I believe the NHS pays for some of the final 2 years (but not the living costs).

So should we try and pay up front?

Or should I save for him to repay early? (And are there imp-lications tax wise in passing the money to him after he is 18?)

Has the idea of a repayment penalty been abolished completely, or might it still get resurrected?

Can he still take the loans if he has savings? Perhaps to put towards a house deposit in the future?

nbldmum

Report by Andrew McGettigan, for the Intergenerational Foundation on BBC news web site today in the education section:

· “the cost of government borrowing adds significantly to the national debt in the short and medium term."
· “there are already concerns about the assumptions made about how many graduates will earn enough to pay back their student debts of between £30,000 and £40,000.”
· “the report points out that if repayments are not made as expected, future governments could change the terms and conditions on the loans to balance the books”.
· “It adds that those who will have already taken out loans "have no protection" against any changes to the terms of their loans.”
· “it adds that future student groups will have loans offered on much less generous terms”.
· “It also claims the government is "secretly investigating" the possibility of selling off student loan liabilities and that under present legislation this can be done without carrying out a consultation.”
· “The author also points out that as tuition fees are included in the basket of goods used to determine the Consumer Price Index raising them to a maximum of £9,000 will have an inflationary effect.”


As daughter is potentially facing 4 yrs @ £9k plus 4 yrs @ £3k living....I can only hope that all those on this forum that have previously said that the terms are unlikely to change are right. Or perhaps we'll all get compensation in years to come as it turns out to be one big miss-selling con.

mariaj_2

I'm confused now. My 2 children have student grants, and to stop the loans increasing through addition of interest, I am paying into the student loan accounts £30 and £40 per month respectively (the loans are different amounts). Is this a wise course?

melancholly

mariaj wrote: »

I'm confused now. My 2 children have student grants, and to stop the loans increasing through addition of interest, I am paying into the student loan accounts £30 and £40 per month respectively (the loans are different amounts). Is this a wise course?

That's incredibly generous of you.... It's generally not advised to do this.
http://www.moneysavingexpert.com/students/student-loans-repay
This article may help. Your children are the ones who owe the money, not you, so I hope they are very grateful for what you're doing!

buffman

Any thoughts about whether it is worthwhile for me to pay for my daughter's maintenance (from savings) while she is at university and let her just take out the loan for tuition fees (assuming that she will earn a slightly above average salary but taking off a few years to have children?).

tyllwyd

Tution fees will be a substantial loan on their own, so if she takes several years off to raise a family, that means it is even less likely that she will pay back the full amount plus interest before the 30-year cut off when it is written off. The amount she pays back will depend on her salary, not the total amount borrowed, so if you think that she will not pay back even the tutition fees within the 30 years, then she may as well borrow the maximum possible.

If it was me, I'd hold on to my savings, wait and see what the situation she is in when she graduates and whether she finds the job she needs, and then decide whether to give her a lump sum to pay back part of the the loan early (or maybe paying credit card etc debts might be more urgent), or maybe help her buy her first property instead etc.

buffman

I assume that the two loans are added togther and treated as one?

tyllwyd wrote: »

If it was me, I'd hold on to my savings, wait and see what the situation she is in when she graduates and whether she finds the job she needs, and then decide whether to give her a lump sum to pay back part of the the loan early (or maybe paying credit card etc debts might be more urgent), or maybe help her buy her first property instead etc.

assuming that she takes out both loans, if my wife and I also jointly give her money for upkeep (which she does not use), is there an inheritence tax issue?

Lokolo

buffman wrote: »

I assume that the two loans are added togther and treated as one?

Yes

assuming that she takes out both loans, if my wife and I also jointly give her money for upkeep (which she does not use), is there an inheritence tax issue?

No

Regular gifts or payments that are part of your normal expenditure

Any regular gifts you make out of your after-tax income, not including your capital, are exempt from Inheritance Tax. These gifts will only qualify if you have enough income left after making them to maintain your normal lifestyle.
These include:

• monthly or other regular payments to someone
• regular gifts for Christmas and birthdays, or wedding/civil partnership anniversaries
• regular premiums on a life insurance policy - for you or someone else

You can also make exempt maintenance payments to:

• your husband, wife or civil partner
• your ex-spouse or former civil partner
• relatives who are dependent on you because of old age or infirmity
• your children, including adopted children and step-children, who are under 18 or in full-time education