How and how much financial support to give our children through university and beyond

LL_USS

Yes I calculate the loan based on household income (mine) and using the government website for student finance calculator, for living away from home in London vs out of London. All just estimated as it is not firm yet where my son goes, and I have put in my taxable income (after pension contribution), still not sure if it is the right number, or should it be gross income - I won't know till I follow through with guidance online when we fill in the application.

@Annabanana82 you are right, we want to help our kids but not the wrong way (spoiling/ damaging them instead of helping). I don't know what is the right way yet though, still waiting to see how things pan out. I myself did work my way up, with no financial help at all from my own parents (because they simply did not have any spare money). But we are living in a different time, and though I am only a middle earner, I have a bit of safety net built up thanks to working on our house and moving up (the kids have gone through all of that hard time with me). So I am willing to help them where I can. I promise I won't stretch too much. I have taugh them about budgeting, they manage their own allowance (plus earning in the case of my son) vs. spending, and they are good with money already I believe (they are totally in charge of cooking a couple of days a week too).

@400ixl: I thought the lowest maintenance allowance is 0 (i.e. only borrowing tuition fee). How can you know what is the mininum allowance, do you mind if I ask. Sorry if it is a silly question. I guess I will know when we really fill in the loan application.

@Spendless: when I said access to job opportunities I meant for after graduating. But I think big cities also have more to offer in terms of placement and work experience whilst they study. I did not think about term time vs full 12 months' tenancy, thanks for noting that. I guess kids may boomerang back after uni too, but they may well be applying for jobs from a big city if the situation allows. It may make sense if my two both end up in the same city then they can share a tiny flat for a while. To be honest, I would love to downsize to nearer to at least one of them when I retire (too far ahead now I suppose :-)

With this dream to perhaps help kids buy, I still consider getting max student loans so I can put max saving aside in case we can realise the dream. 

J_forest

Hi!

My child is going to Uni this September too. I have been thinking to help with accommodation and expenses. 

Most accommodations is around £150 a week, I think £100 a week should be enough for food and expenses? So, approximately £1000 a month?

What kind of part-time jobs did you children do or they have been doing?

Thanks.

400ixl

LL_USS said:

Yes I calculate the loan based on household income (mine) and using the government website for student finance calculator, for living away from home in London vs out of London. All just estimated as it is not firm yet where my son goes, and I have put in my taxable income (after pension contribution), still not sure if it is the right number, or should it be gross income - I won't know till I follow through with guidance online when we fill in the application.

@Annabanana82 you are right, we want to help our kids but not the wrong way (spoiling/ damaging them instead of helping). I don't know what is the right way yet though, still waiting to see how things pan out. I myself did work my way up, with no financial help at all from my own parents (because they simply did not have any spare money). But we are living in a different time, and though I am only a middle earner, I have a bit of safety net built up thanks to working on our house and moving up (the kids have gone through all of that hard time with me). So I am willing to help them where I can. I promise I won't stretch too much. I have taugh them about budgeting, they manage their own allowance (plus earning in the case of my son) vs. spending, and they are good with money already I believe (they are totally in charge of cooking a couple of days a week too).

@400ixl: I thought the lowest maintenance allowance is 0 (i.e. only borrowing tuition fee). How can you know what is the mininum allowance, do you mind if I ask. Sorry if it is a silly question. I guess I will know when we really fill in the loan application.

@Spendless: when I said access to job opportunities I meant for after graduating. But I think big cities also have more to offer in terms of placement and work experience whilst they study. I did not think about term time vs full 12 months' tenancy, thanks for noting that. I guess kids may boomerang back after uni too, but they may well be applying for jobs from a big city if the situation allows. It may make sense if my two both end up in the same city then they can share a tiny flat for a while. To be honest, I would love to downsize to nearer to at least one of them when I retire (too far ahead now I suppose :-)

With this dream to perhaps help kids buy, I still consider getting max student loans so I can put max saving aside in case we can realise the dream. 

You can choose not to claim the maintenance grant, you may even be able to choose your own number up to whatever they have calculated as the maximum they will pay.

LL_USS

J_forest said:

Hi!

My child is going to Uni this September too. I have been thinking to help with accommodation and expenses. 

Most accommodations is around £150 a week, I think £100 a week should be enough for food and expenses? So, approximately £1000 a month?

What kind of part-time jobs did you children do or they have been doing?

Thanks.

@J_forest Sorry we've been away for work for a few days.
It is cheaper for accommodation in your child's case. London is just so expensive. I still wonder whether it's worth it. I am still only estimating the costs. My friends' children, who started university last year or the year before, they seem to think £1,000 budget for universities in the north/ midland can work. It will be up to the youngers to manage. If they cook often and do not go to bars/ pubs, keeping expenses for essentials only then £1,000/m is enough. 

I will have to budget more for mine for those places that he is applying to. He plays a few sports and likes to hang out with friends so I'll ask him to work just a bit to cover non-essential stuffs.

I still have no idea what part time jobs they can find during their study. I work at a university and I can see many of my (home) students struggle between studying and earning money (MSc international students tend to be all subsidized by parents so they don't have that struggle). I will try to only encourage my son to work to learn the value of work and money, but if I could, try to help him enough so he can keep a good balance.

He is doing odd labour jobs (gardening, working in allottments), teaching friends and family a bit, and volunteering, but nothing substantial yet. We can dream of some paid company internship in the final year(s) for them but in general, I can see that usual students only have non-paid placement work (that is still good for their CV and confidence though).

It seems I still work things out as we go along.

LL_USS

@400ixl thank you. I think we will try to borrow as much as we can for maintenance (given what's allowed for our case) then use the money to add to helping the children beyond university, getting up the property ladder. I am playing by ear, if it's not good buying and the children earn good salary (which means they tend to have to pay back all the loan) then we can consider overpayments.

LL_USS

I have done more calculation regarding student loans and have the following conclusion:

- New student loan plan 5, interest rate = RPI (normally about 1% higher than CPI). This year it is still about 7.5% rate

- Martin Lewis says it is just your loan (say 1,000 trolleys of food) you have now then when you pay it is 1,000 trolley of goods. Yet three years the kids at uni no paying back yet the loan already has rollled on compound interest. And when the kids only pay a small part back (9% of their salary over 25K/year) the loan itself is just getting bigger and bigger.

True if we don't have money to give kids to cover uni fees and costs then no choice, we need to borrow.

If one has a choice, unless the person uses that same amount that they could pay for uni for another purpose and that has compound impact in profits/ benefits then it is still better to pay for uni, especially when they are CERTAIN that the kids will have a well-paid job and certainly have to pay back the loan (EDIT: I meant this as a rhetoric but did not say it right - nobody can be certain about this future prospect, Martin Lewis has given lots of examples about this too).

Spendless

LL_USS said:

I have done more calculation regarding student loans and have the following conclusion:

- New student loan plan 5, interest rate = RPI (normally about 1% higher than CPI). This year it is still about 7.5% rate

- Martin Lewis says it is just your loan (say 1,000 trolleys of food) you have now then when you pay it is 1,000 trolley of goods. Yet three years the kids at uni no paying back yet the loan already has rollled on compound interest. And when the kids only pay a small part back (9% of their salary over 25K/year) the loan itself is just getting bigger and bigger.

True if we don't have money to give kids to cover uni fees and costs then no choice, we need to borrow.

If one has a choice, unless the person uses that same amount that they could pay for uni for another purpose and that has compound impact in profits/ benefits then it is still better to pay for uni, especially when they are CERTAIN that the kids will have a well-paid job and certainly have to pay back the loan.

Explain to me how you can be certain? The most academic person at my school was a girl. I'd have bet money on her having a glittering career in whatever avenue she chose. As she was graduating she started suffering from some health issues. She was diagnosed with MS and has never worked.

My own son was told as he visited his preferred Uni, what salary he could expect if he was to go and work overseas following graduation. Son met his wife at Uni, married a year after graduating and loves his local job in a connected field where he still doesn't earn enough to pay anything back. By the time he does then he is going to be several years into the term of his loan where he is required to.

A uni friend of my sons, at the end of his first year at Uni unexpectedly became a millionaire when his estranged Dad who had been involved in a RTC years earlier and awarded a lot of compensation  died intestate. Said friend was camping in my garden at the time. No idea how inheritance is treated when it comes to paying back student loans but friend had a different set of circs within a year of starting his degree.

You'd be far better off asking on the student board about this though.  

LL_USS

@Spendless that's my point. It was meant to be a rhetoric, but sorry I didn't say it right. Nobody can be certain about the future, or a future of a high income.

I do plan to borrow max student loan that we are allowed for my son. Any saving after living costs and topping up his uni costs will be invested in something else.

LL_USS

@Spendless and others

My kid has got results of student loan application. Almost maximum for maintenance loan (I am the owner bread earner and still have another dependent, also, it is noted that volunteer contribution to pension is deducted from parent's taxable income, the basis for calculation of maintenance loan)!!!! Very happy.

Crazy costs for rent though. It would be difficult to manage without a big loan.

Spendless

LL_USS said:

@Spendless and others

My kid has got results of student loan application. Almost maximum for maintenance loan (I am the owner bread earner and still have another dependent, also, it is noted that volunteer contribution to pension is deducted from parent's taxable income, the basis for calculation of maintenance loan)!!!! Very happy.

Crazy costs for rent though. It would be difficult to manage without a big loan.

That's exactly the issue.  Parent are supposed (but not obligated) to find the difference between the loan their child receives and the maximum. Some can't, some won't. Many don't plan because they're unaware of this situation (I see the online calculator is now making reference to why students  don't receive the full amount - something I'm aware Martin Lewis has campaigned for)  and then the rents are really high too. Finding part time work around term-time  studies isn't always possible, my daughter is in class 5 times a week