Why bother saving!

UNI3653

My son has just left University, and has saved £13,000 of student loan, which is still in his account. he actually owe's £20,831.53, and is accruing interest on this which is constantly increasing the total amount owed, which in turn increases the interest, and so on. Therefore he need's to be repaying this immediately. During the whole of last year he received less than £20 interest from the bank on his money and yet he is having to pay £6 a week, amounting to £312 a year in interest on the loan. The only reason he still has this money is because we his parents have financed him for the past 5 yrs during his time at college and university, and he hasn't yet started to repay us. he currently gives us £50 per week for current living expenses. Not a single penny in his account is his, yet my his claim for JSA has been capped at £28 p/w, instead of £56.80, due to him having more than £6000 in his account. he is also told to reduce the amount he pay's us and ALL OTHER EXPENDITURE to below £30 per week meaning he is not allowed to pay rent, else lose the JSA. Furthermore, I he is told that if he pays back his loan he will be penalised by having the JSA capped even further or removed altogether for "intentionally reducing capital".
This is a totally unworkable situation, and simply leads to his debts going up and up.
This cannot be right.
On top of this we went to the citizen advice bureau for advice to be told because we his parents who have never claimed a penny in benefits and are struggling hard working low paid tax payers and don't live in council property we have to wait 5 weeks for advice,Had we been on benefit and live in government paid for council property we could see some one in 3 days!

Lokolo

UNI3653 wrote: »

My son has just left University, and has saved £13,000 of student loan, which is still in his account. he actually owe's £20,831.53, and is accruing interest on this which is constantly increasing the total amount owed, which in turn increases the interest, and so on. Therefore he need's to be repaying this immediately. During the whole of last year he received less than £20 interest from the bank on his money and yet he is having to pay £6 a week, amounting to £312 a year in interest on the loan. The only reason he still has this money is because we his parents have financed him for the past 5 yrs during his time at college and university, and he hasn't yet started to repay us.

Well for starters, the likely reason the loan is costing more is because the capital on the loan is more.

To profit from pre 2012/post 1998 loans, all you have to do is put the money in an account which pays more than 1.5%.

he currently gives us £50 per week for current living expenses. Not a single penny in his account is his, yet my his claim for JSA has been capped at £28 p/w, instead of £56.80, due to him having more than £6000 in his account. he is also told to reduce the amount he pay's us and ALL OTHER EXPENDITURE to below £30 per week meaning he is not allowed to pay rent, else lose the JSA. Furthermore, I he is told that if he pays back his loan he will be penalised by having the JSA capped even further or removed altogether for "intentionally reducing capital".
This is a totally unworkable situation, and simply leads to his debts going up and up.
This cannot be right.
On top of this we went to the citizen advice bureau for advice to be told because we his parents who have never claimed a penny in benefits and are struggling hard working low paid tax payers and don't live in council property we have to wait 5 weeks for advice,Had we been on benefit and live in government paid for council property we could see some one in 3 days!

As for this, tell him to get a job or move out? Why should he get JSA if he has £13k in savings!? Jeez.

jacques_chirac

He may pay you rent if you ask for it, but he will not receive assistance with housing costs. His JSA will remain the same.

What interest rate is his student loan at, and his savings account?

fishybusiness

So he owes £21k, out of that saved £13k if I read it correctly.

The only reason he still has this money is because we his parents have financed him for the past 5 yrs during his time at college and university

Is it? Now why would you do that if you knew he was well covered by SFE?

Not a single penny in his account is his

Yes it is, it is all his.

This is a totally unworkable situation, and simply leads to his debts going up and up

I don't see it, I see your point of view, but for your son, he is actually in a great place. Money in the bank, some kind of HE qualification and not too much life stress at the beginning of his life after university. Isn't that what you would have wanted?

we went to the citizen advice bureau for advice to be told because we his parents who have never claimed a penny in benefits and are struggling hard working low paid tax payers and don't live in council property we have to wait 5 weeks for advice,Had we been on benefit and live in government paid for council property we could see some one in 3 days!

So now you are having a go at the 'benefit scroungers', and council house tenants!

Seems to me that you paid out for your son, with some kind of hope of repayment, or even for him to clear up some of his debt early, and you didn't know the rules. Now you are annoyed.

Hopefully he will find work soon and the problem will go away.

Voyager2002

You have nothing to gain from CAB, since the rules on JSA have been applied correctly. You may believe that the rules are unjust and you have been treated unfairly, but the solution is to change the rules, and to do that you need to speak to your MP. Oh, and use your vote whenever there is an election.

Hasty1991

UNI3653 wrote: »

My son has just left University, and has saved £13,000 of student loan, which is still in his account. he actually owe's £20,831.53, and is accruing interest on this which is constantly increasing the total amount owed, which in turn increases the interest, and so on.

I think I understand your frustration but, duh? Doesn't this part of your post answer the situation for you...? It was a loan, it had a purpose. It was not a loan provided as an investment vehicle. The loan was to support students through their studies, not to provide cheap capital for investment. If you can get it to work for you, great. If it doesn't work out, then so be it, that's a risk that has been taken. If he never intended to spend the loan, why was it all taken?

brendon

I'll do a simple calculation for you. Suppose he does pay back £13,000 and gets and extra £28.80 in JSA per week. It would take him 451 additional weeks of claiming JSA to "see" that £13,000 again. That's 8 and a half years.

It would be stupid to pay back £13,000 with the thought that it is saving money. It will do nothing but make life more difficult. Having that cash available will make it easier to: find a job, furnish a flat, put a deposit on a house, buy a car, etc.

anarchied

brendon wrote: »

Having that cash available will make it easier to: find a job, furnish a flat, put a deposit on a house, buy a car, etc.

..Or to pay his parents back?

It's late and I'm tired and confused. Why did he get a student loan if you were financing him? Why were you financing him if he was getting a student loan?

pandora205

If your son is under 25 and did not live independently for 3 years prior then the expectation is that parents contribute to his keep while at university (depending on income). So why is your son having to pay you back?

Voyager2002

pandora205 wrote: »

If your son is under 25 and did not live independently for 3 years prior then the expectation is that parents contribute to his keep while at university (depending on income). So why is your son having to pay you back?

The loan amount is adjusted to take into account the contribution from the parents. These parents clearly provided a good deal more assistance than could reasonably have been expected.

Again, it might be reasonable for many parents to regard their assistance to student children as a loan rather than a gift, to be repaid once they have graduated and found financial security.

milo_jasper

Still though, that's asking a little much to ask your kids to pay you back.