Take out a student loan?

stuwho

First of, apologies if this is the wrong place. We're in Scotland & my son is going to university. We should be able to support him through it, but just wondered if it was still worthwhile him taking a student loan that he could put aside as savings. He will be working part time while studying, so technically he'd be using the student loan & saving his earnings. Just wondered if 
1 Is he allowed to do this

2 What's the pros & cons for taking a loan.
I know he'll have to pay back 9% of what he earns over the threshold, but like I've said, is it worthwhile doing it to maybe fund a mortgage deposit in years to come?
Thanks

silvercar

1. Yes
2. pros  are more money in his bank account for anything, including house deposits, pensions, holidays...
cons are the interest charged. As you say it could be wiped out in 30 years, in which case it would have been a great deal. Time for a crystal ball, look for future earnings potential.

[Deleted User]

It depends on the circumstances obviously, but for what it's worth, I went to uni in Scotland and if I could go back in time I wouldn't take a student loan. At the time (as an 18-year-old) I didn't think twice about it. It was free money, I signed up and blew it on a load of student things (clothes I didn't need, a guitar amp, etc.) I'm still paying £100 or so out of my salary some two decades later for that - it doesn't cripple me financially by any means, it was just a pointless waste of money.

Spendless

I think this is where the difference in student funding between Scotland and England come into play. In England when you're paying around £27K+  in tuition fees for a 3 year degree, it's quite possibly going to take you some time to pay even that off, so adding on the maintenance  loan in a number of cases just means altering the amount wiped off at the end.
In Scotland where you're getting free tuition, it really depends on what you intend doing with the money. If it's using it for things like a house deposit, where it would take a considerable amount of time to save the equivalent amount then it's quite possibly worth it. If it's going to go on pizza, booze and other things that could quite easily be paid for out of p-time earnings then it probably isn't worth taking. 

[Deleted User]

Spendless said:

I think this is where the difference in student funding between Scotland and England come into play. In England when you're paying around £27K+  in tuition fees for a 3 year degree, it's quite possibly going to take you some time to pay even that off, so adding on the maintenance  loan in a number of cases just means altering the amount wiped off at the end.
In Scotland where you're getting free tuition, it really depends on what you intend doing with the money. If it's using it for things like a house deposit, where it would take a considerable amount of time to save the equivalent amount then it's quite possibly worth it. If it's going to go on pizza, booze and other things that could quite easily be paid for out of p-time earnings then it probably isn't worth taking. 

I agree with this, a student loan in itself isn't a bad thing if you use the money wisely. You aren't going to get a loan as favourable as that in any other way. It basically depends on how responsible the student is and whether they're really aware of what they're doing. I certainly didn't give it any considered thought when I was a teenager and I don't remember anyone else I went to university with thinking about it properly either.

John_Howarth21

I would still take a student loan out even though you are helping him through it and he is working alongside this. Even if he doesn't get much money it will still be handy for other items he might want to buy or just to put his savings account because it will be worth it when he is older and that percentage he has to pay back shouldn't have to much impact on his income in the future. 

inthezeroroom

If you are in a position to cashflow him through university (which is obviously fantastic and generous of you) then I imagine it would be a tremendous feeling to graduate debt free. Just a thought.