Self-paying student loan

[Deleted User]

Should I pay my son's final year university tuition fees to avoid increasing his loan and the associated interest? We live in England.

Jemma01

If you want to! If you know your son is a good kid, grateful, treats you guys well, and you have the finances, then why not.

If you know this would create a financial burden for you and you're not well off, then maybe not 🤔

Woodstok2000

Its a difficult one without a crystal ball! You say he already has a student loan, so he'll be making repayments anyway once his earnings hit the threshold. The size of the loan doesn't impact his repayments as they are based purely on salary.

What may be impacted is the duration of the repayments. If he would hit the 30 year write off point with the lower loan, then taking the extra is essentially free money. If he earns enough to pay the loan off, then he's getting hit with the interest and may have been better off if you paid it.

Maybe you could pay it off and let him pay you back interest free if/when his earnings are sufficient. You could then use the money for anything you want, including gifting it back to him.

silvercar

Would he prefer the money be used for a home deposit?

IS he likely to repay his loan in full? If not it may not be worthwhile clearing the 3rd year fees alone as this won’t alter repayments and if he isn’t likely to clear it, it won’t make any difference to him.

Bizzywizard

Have you looked at the Unis website about paying the loan?

Exeter offer 6 months at certain times to pay it back . I'm sure your sons Uni does too. I'm thinking of paying my daughters second and third year as we will have paid off our mortgage in August this year, so why not!

silvercar

https://forums.moneysavingexpert.com/discussion/comment/81938196#Comment_81938196

The 'why not' is easy! Could something better be done with the money eg a house deposit? Is your daughter likely to be earning enough over the long term to clear the loan she will have? If not, then paying for studies now is money thrown away (well thrown to the government unnecessarily).

Smudgeismydog

The interest racks up so quickly, and it’s a huge psychological burden for young adults to have hanging over them as they graduate.

I am contributing so my daughter doesn’t have to take a loan. With the current interest rates, repayment term, and minimum income thresholds, they will start repaying on basic incomes, with seemingly no hope of ever clearing it.

Thats not what I want for my child