Cost of University course

Jaco70

This is almost certainly in the wrong forum but I couldn't work out where it should go, so apologies.
My son is off to Uni this year, to do a Finance & Accountancy degree, and I am trying to research how much this three year course is going to cost in total. With tuition fees of 10k pa and accommodation at a similar level, that's likely to be 100k imo, which I find a bit sobering.
He has applied to five Uni's, including one in our home city, and if he chooses that it would be a huge saving, but he hasn't yet been accepted there and may choose to live away anyway.
When I speak to parents of students, they are very laissez faire about student loans, almost like it isn't actual debt, but it is. They say "its only repayable once earnings hit a certain level", but if you're not going to earn 30 or 40k what is the point in doing a degree?
Basically my question is, what sort of debt levels are your kids finishing Uni with?
I thought we were reasonably comfortable, and our younger son has said he doesn't want to go to Uni, but I can't cover 100k.

pinkshoes

Jaco70 said:

This is almost certainly in the wrong forum but I couldn't work out where it should go, so apologies.
My son is off to Uni this year, to do a Finance & Accountancy degree, and I am trying to research how much this three year course is going to cost in total. With tuition fees of 10k pa and accommodation at a similar level, that's likely to be 100k imo, which I find a bit sobering.
He has applied to five Uni's, including one in our home city, and if he chooses that it would be a huge saving, but he hasn't yet been accepted there and may choose to live away anyway.
When I speak to parents of students, they are very laissez faire about student loans, almost like it isn't actual debt, but it is. They say "its only repayable once earnings hit a certain level", but if you're not going to earn 30 or 40k what is the point in doing a degree?
Basically my question is, what sort of debt levels are your kids finishing Uni with?
I thought we were reasonably comfortable, and our younger son has said he doesn't want to go to Uni, but I can't cover 100k.

Why do you need to cover £100k? That's what the loans are for...

The point of a degree is to further your knowledge, for personal gratification, for wanting to better yourself, and hopefully to get a better paid job. You could argue "what's the point?" for so many things in life, but life is for living. 

Don't think of it as a £100k debt. The loan isn't paid back until you earn over £27,295/year, and then you pay 9% of anything over that amount, so it's hardly going to cause hardship.

Then, if you haven't paid your debt 30 years after graduating (so aged 52 ish) it gets wiped out. 

You would be daft not to go with the current system, as it will no doubt get stopped soon when the government realise that 1000s of students will never pay back their loan and it is not an affordable system!

I'm on the "old" system where mine wouldn't get wiped out until I was 65, and I paid only £1k tuition fees a year. I paid mine off last year with some inheritance as I worked out that financially it was worth it (loan interest vs interest on my inheritance).

Spendless

I'd suggest you read some articles on the subject that are on this site for a better understanding. 

Are you rounding up the tuition fees? I'm asking because I believe the maximum you can borrow is £9250 from student loans. If it's really £10K then I'd get that clarified what can be borrowed. 

The maintenance loan how much you can receive is dependant on the household income of the parent/s (and parent's partner if applicable).

If you thought of it as a graduation tax instead, there's no way you'd be considering paying your son's income tax bill. You are also aware that some employers do ask for applicants to be 'educated to degree level'? 

My own son graduates later this year. This is his 4th year of study due to being put on a foundation year first due to poor sixth form results (not due to lack of ability either!) so

 4 x 9250 (tuition fees)  = £37K
plus 4 years of receiving the minimum loan of around £4K = £16K

£53K in total, plus interest will be applied. Do I expect him to pay that off in 30 years, do I hell. I expect it to be written off anything owing after his 30 years. It'll make no difference to his repayments, which are earnings related, not amount borrowed related, so no difference if at that point he owes £4K or £40K (or any other amount) it gets wiped off. 
   

tooldle

Where in the UK are you? How the funding is structured varies according to the home nation. I’m in Wales, here students maintenance is a sliding scale of bursary and loan meaning, those  on high incomes have a full loan for maintenance and those with very low incomes are covered without cost to self. Rounding up the figures my daughter has ‘borrowed’ three yrs of fees (30K) and three yrs of maintenance (30K). It is true accommodations can be very expensive but as with all things there will be a range of options to suit the budget. Daughter in her final yr is paying approx £100 per week for a room in a shared house. 

GrumpyDil

To re-iterate what everyone else has said. My daughter is in year 2 of her degree.

It's been an odd couple of years with all the Covid issues but she has managed to work over holidays and has a term time job, to the extent she maxed out contributions to her Lisa this financial year. 

That suggests she could have avoided taking out the maintenance loan element but given how the loan repayments are structured felt the better option to us. 

Username03725

I like Martin Lewis's advice - for most students who don't anticipate paying off the student loan, the best thing is to pin the annual statement to a dartboard and throw darts at it.

Numbers-wise if the interest rate went up to 100% APR and the tuition fees started at £1m p.a., as long as the repayments remain at 9% of taxable income above threshold it wouldn't make one jot of difference to the student's ongoing costs. 9% of his taxable income above threshold stays the same, even if the debt is £1m. That's what matters.

london21

You might be overthinking it.

Might not get to 100k, depending on where the university is based. London is very expensive. It's cheaper to stay at home, but then the student experience. I stayed in Southampton, which is less than half what it would have cost me in London. ( Sharing a 4 bedroom with other students would be more expensive, for example, having a 1 bedroom flat)

Depending on your child’s circumstances, some universities offer grants and bursaries.

When I studied from 2008-2011, fees were lower but paid for accommodation etc.

The student loan is not repaid until you start earning a certain threshold.

Yes, it is a loan, but not like a bank loan.

I worked part time whilst studying in my 1st and 2nd year, but the best tip would be to encourage your child to do internships, placements etc. to have work experience to get the best possible chance of getting a well-paid professional role once they graduate.

When I graduated, I had retail experience but lacked corporate financial experience, which made it a little harder to land my dream role immediately after graduation.

10 years on from graduation, no regrets and started with loan of nearly £20k ish now down to £3k.

Not everyone will pay off their student loan.

A lot of students are in similar situation.

silvercar

I’ll move this over to the student board.

OP, it might be worth you having a look at some of the other threads on that board.

TheAble

9% is a lot though if you're paying it for 30 years, when you factor in your other income tax, NI, council tax etc. Call it a tax or whatever you want, it was painful, and I certainly wouldn't have wanted to pay it for 30 years (40 years now) even if it the remainder did then get wiped.

silvercar

With a finance and accountancy degree, the options are good. In banking and certain city finance jobs the sky's the limit. 
Large accountancy firms in London recruit at the 25-30k range and can expect to be earning near 50k after qualifying (another 3 years study).

Tuition fees are 9,250 a year usually. Maintenance is a mix of grant and loan for those from low earning families. I wouldn't say 10k is needed unless you are in a big expensive city.

Cash-Cows

Jaco70 said:

Basically my question is, what sort of debt levels are your kids finishing Uni with?
I thought we were reasonably comfortable, and our younger son has said he doesn't want to go to Uni, but I can't cover 100k.

Debt level for my daughter was zero. We paid her a monthly amount (only £150) while at Uni but she earned her own money in the holidays.

Like others have said you don't pay all the cash yourself, use loans and even if they earn £40k repayments per month will be not much more than a mobile phone contract. 

And stop calling it debt. Search Martin Lewis video on the subject where he explodes when a politician called it a debt.