Saving for University

CLAPTON

ViolaLass wrote: »

I agree. I don't see the need for parents to save and worry so much. I have £20k of student debt which I will pay off in due course but it doesn't concern me and I wouldn't like my parents to have worried and saved for years for it.

well from this year fees are 9k per annum so 27k plus maintencance loans 15k so 42K

and loans APR are inflation plus 3% so about 6-7% at the moment

(scientists and engineeers typically do a 4 year course so £56,000)

a bit more than you're are paying but you knew that

atush

Student loans are not only set to double or triple (you who have already graduated paid either nothing or 1-3 K per year not 9K), but the rates of interest are going to be much higher than those of you have mentionned.

I, like the OP am trying to see my children graduate debt free. I personally see that as being a good parent, not a bad one. But I do stress you have to see to your future as well.

ViolaLass

CLAPTON wrote: »

a bit more than you're are paying but you knew that

Yes I do, but I still think, like other posters, that having to weigh up the financial side of it when deciding whether to go is not such a bad idea. Plus, if you never make much money after university, the interest rate and the amount are irrelevant.

tight_is_right

atush wrote: »

I, like the OP am trying to see my children graduate debt free.

While technically it is a debt, the student loan doesn't behave like a normal loan or mortgage, rather it's more of a tax. You pay more when you earn more, less when you earn less and it's such a tiny fraction each month that it really don't make any difference.

If you want to be a 'responsible parent' then imo you'd be better giving them a lump sum once they graduate to put to a house. Being able to buy their own home when young will give them much more benefit than saving them ~150pm on their loan.

runningliz

Thank you for taking the time to reply. I love reading the personal opinions. My idea was to save now as i am self employed in a job that will probably get less as i get older (it is very physical as i am a personal trainer). I have no intention of saying to them 'here is £x,000 off you go!'
I want to make sure I have the money there and it can be used towards fees/ flat deposit/ vocational training etc, etc. I can still do this along with them learning the skills of money management. if they want to go and get hammered at the weekend they can get a saturday job and earn that money that way!
Thanks again for all the answers and opinions - i feel much better about it. For example taking advantage of tax free children's saving schemes.
P.s. I was a student too (in the old days when there was a grant) student loans had come out and i know they have excellent interest rates and payback plans - but, it was still a debt.

slickric1234

liz, id say it depends if you currently have any debts
loans, credit cards, mortgage at higher rate than you can save at etc

if so your better paying them off asap then starting to save for university in the future, £250 a monthfor 10 years is a massive university warchest

even if you tie money up and get 5% , youd be far better paying off a 20% credit card first then starting to save afterwards

personally hsbc do a hih interest regular saver promotion iirc, cahoot 3.6% 1 year tie up

never know what base rate is going to do and its got to rise soon, so i wouldnt go for a 4% 3 year bond personally

runningliz

slickric1234 wrote: »

liz, id say it depends if you currently have any debts
loans, credit cards, mortgage at higher rate than you can save at etc

if so your better paying them off asap then starting to save for university in the future, £250 a monthfor 10 years is a massive university warchest

even if you tie money up and get 5% , youd be far better paying off a 20% credit card first then starting to save afterwards

personally hsbc do a hih interest regular saver promotion iirc, cahoot 3.6% 1 year tie up

never know what base rate is going to do and its got to rise soon, so i wouldnt go for a 4% 3 year bond personally

Thanks for this slickric1234. We don't have any credit cards or loans - just the mortgage. You are right though 10 years is a long time so if there is money left over it can be put towards something else. I am hoping if we are nice to them - they will be nice to us when we are old and need looking after

atush

tight_is_right wrote: »

While technically it is a debt, the student loan doesn't behave like a normal loan or mortgage, rather it's more of a tax. You pay more when you earn more, less when you earn less and it's such a tiny fraction each month that it really don't make any difference.

If you want to be a 'responsible parent' then imo you'd be better giving them a lump sum once they graduate to put to a house. Being able to buy their own home when young will give them much more benefit than saving them ~150pm on their loan.

I intend to be able to give them a lump sum as well (eldest will get 4-5K of Uni money left over).

I am trying to do both, thank you very much.

Carrying student loan debt, with costs approaching 20K per year now, will affect their ability to get a mtg.

lowlitmemory

atush wrote: »

I intend to be able to give them a lump sum as well (eldest will get 4-5K of Uni money left over).

I am trying to do both, thank you very much.

Carrying student loan debt, with costs approaching 20K per year now, will affect their ability to get a mtg.

See Martin's own guide on this: http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

"No. 14: The new system is unlikely to impact the ability to get a mortgage"

CLAPTON

lowlitmemory wrote: »

See Martin's own guide on this: http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

"No. 14: The new system is unlikely to impact the ability to get a mortgage"

a family member and young graduate, when applying for a mortgage, was assessed on their student loan payments and the amount offered was reduced


try putting numbers into nationwide's calculator and see the affects

https://portal.nationet.com/nationwide/affordability/(ufebglq111znou45nzif3255)/Results.aspx