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

Dunroamin

DAISYDOG wrote: »

They have no requirement to increase the 21k amount , if its held down the payments will only ever pay off interest.
The Government can change the terms, and will just like the pensions

And that matters because?

Jessy1207

Hi I'm a student trying to pay my own tuition fees, unfortunately as I have already studied a higher education course student finance will not give me my first years tuition fee. They have stated that if I can fund the first year myself they would fund the remaining two years of my course. Can anybody help me please. Thank you

davestretty

What precisely was the higher education course you did? Was it full time or part time? how was it funded and did you complete the course?

davestretty

Don't know if this has been discussed before - apologies if it has. My daughter started a 5 year medical degree course Sept 2013 and after reading the forum advice we took out the full tuition and maintenance loan. I am now wondering if this is best in this case. Hopefully she will qualify and earn a significant income sufficient to pay off the loans relatively quickly. In this case the interest she will be charged would be >5.5%. If we remortgage (plenty of equity) we can get a much better rate than this, currently ~3%. Surely in this case that is financially more sensible - any thoughts welcome

Lokolo

davestretty wrote: »

Don't know if this has been discussed before - apologies if it has. My daughter started a 5 year medical degree course Sept 2013 and after reading the forum advice we took out the full tuition and maintenance loan. I am now wondering if this is best in this case. Hopefully she will qualify and earn a significant income sufficient to pay off the loans relatively quickly. In this case the interest she will be charged would be >5.5%. If we remortgage (plenty of equity) we can get a much better rate than this, currently ~3%. Surely in this case that is financially more sensible - any thoughts welcome

There are advantages and disadvantages.

She has taken the loan. If she (touch wood she doesn't anytime soon) dies, that loan is wiped. If you had taken out mortgage money that money would be lost.

By all means, if you have plenty of money and would rather do it then its fine to do that.

It really does depend on individual circumstances.

davestretty

Fair point on death issue, perhaps life (her life) insurance would take care of that. It would be interesting to see some calcs based on both situations.

Lokolo

davestretty wrote: »

Fair point on death issue, perhaps life (her life) insurance would take care of that. It would be interesting to see some calcs based on both situations.

There are too many variables for that really.

tyllwyd

davestretty wrote: »

Fair point on death issue, perhaps life (her life) insurance would take care of that. It would be interesting to see some calcs based on both situations.

Martin has a calculator here
http://www.moneysavingexpert.com/students/student-finance-calculator
but I'd agree that there are too many variables so you can't rely too much on any results.

At the moment the student loan is your daughter's debt - if you take out a mortgage, it will be your debt and you will take the risk that she might not repay it - you might decide that's not a problem, but you should be aware of the possibility.


If your daughter doesn't complete her medical studies, or can't find a job afterwards, the repayments on her loan will depend on her actual salary - a mortgage repayment will be need to be made even if she isn't earning.

davestretty

I've used the MSE calculator. OMG she will borrow ~£75k (assuming tuition fees don't increase!) and it is likely that she will have to pay back in excess of £250,000 over less than 30 years. Yes I did say >£250k i.e a quarter of a million pounds!. I daren't show her these figures she is already frightened to death of the amount of debt she will have.

Indie_Kid

davestretty wrote: »

I've used the MSE calculator. OMG she will borrow ~£75k (assuming tuition fees don't increase!) and it is likely that she will have to pay back in excess of £250,000 over less than 30 years. Yes I did say >£250k i.e a quarter of a million pounds!. I daren't show her these figures she is already frightened to death of the amount of debt she will have.

Ouch! I won't be borrowing anywhere near as much; but the interest thing has put me off. I have thankfully, enough set aside for at least pay for my first year tuition.