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

setmefree2

Lokolo wrote: »

The biggest risk to student loans is that you end up having to pay more back the more you earn.

That's a big risk!

setmefree2

Lokolo wrote: »

What you want, and what they want, could be entirely different though.

It's my money

Oldernotwiser

setmefree2 wrote: »

Mortgages can be extended, over paid, renegotiated to a lower rate. You can sell your house, rent out rooms....

....9% of your salary for 30 years, is 9% of your salary for 30 years.

Decision made.

Mortgages still have to be paid if you're unemployed, starting a family or become disabled.

Decision made.

kayr_2

This latest flurry of posts just illustrates how many variables there are. And we don't even know the full story for the new loans yet, never mind how the economic situation is going to pan out. Our decision isn't made yet (don't have to make it for a couple of years anyway) but it will definitely be a harder decision to make than for son #1. It is not as simple as "take the loan as you might never have to repay it". This may be true but the likelihood is variable! Anyway, it's only money - can't take it with you! And the world economy might deteriorate to such an extent that student loans are the least of our problems.

kayr_2

silvercar wrote: »

Given that most kids want to learn to drive at 17, you probably find they need a car before they get to uni.

I'm not sure a 17 year old needs a car unless they live somewhere pretty remote or there are other special circumstances. And most university students can manage perfectly well without a car - it's pretty expensive insuring one at that age, especially for boys. Bikes, public transport, walking - seems to work pretty well on the whole.

Lokolo

setmefree2 wrote: »

Our mortgage is less than 1%.

And that is not what the ML article says - it says the mortgage and the SLs cost are the same. (All though I have to say I disagree, I think mortgages will be cheaper than 2012 SLs if you look at them over 25 years. But that's another unknown known)

But very unlikely to stay like that over the next 30 years......

Lokolo

setmefree2 wrote: »

Another what if...

....what if we don't pay our son's tuition fees and we do give him him a house deposit
and then his marriage fails
and his wife gets the house...

dear son will be left still paying 9% of his salary in tax and have no where to live....

Why would the wife get the house if he put his own equity into it? She wouldn't.

Lokolo

setmefree2 wrote: »

I can only deal with known knowns - the tuition fees.

As for the unknown knowns - our kids might marry someone rich and may not need a house deposit, our kids might inherit and may not need a house deposit, our kids may be able to get a mortgage at a really low interest rate, our kids might end up divorced and lose their house ( we have boys).... all unknown...

And your son may get a job earning under the threshold and never pay back any of his loan. Interests may rise, inflation may not fall in January etc.etc.

There are no known knowns in this game.

You go by what makes most sense, which is the student loan option as you have better advantages over it than a mortgage.

setmefree2

Oldernotwiser wrote: »

Mortgages still have to be paid if you're unemployed, starting a family or become disabled.

Decision made.

You can sell a house..... you can't get rid of a student loan...

setmefree2

kayr wrote: »

Anyway, it's only money - can't take it with you!

Indeed. And if you don't give it away to your kids in advance then the tax man will have his 40% in inheritance tax anyways....