Savings or maximum loan

johannis

Hi, I'm just beginning a journey into student finances as my son has just turned 18 and contemplating going to University (He has an unconditional offer from a great place to do the course he wants to do, all good so far).

It's time to get the finances in place and I've spent a morning online reading conflicting advice. He is fortunate that he has grandparents who have been saving for him and he has nearly £20k to contribute. We have always assumed that he'd use this to offset the size of loan he'd end up taking out but now i'm wondering whether it's better to maximise his loan and hold money back to put towards a deposit on a mortgage?

Also, he is contemplating a year out and starting in 2027, the loan system appears to be changing, although i can see little difference for someone of his age. The only possible financial benefit i can see is related to me being out of work for a six month period during 25/26. Is there any financial benefit to waiting a year?

I'd appreciate the thoughts of those with a better handle on this. thanks

silvercar

For the grandparents contribution, I would always consider whether the money could be used for something else eg a house deposit. Also consider whether your son is likely to have a high paying career. If he won’t, it may make more sense to max out the loans as it will eventually get written off. I realise it is hard to predict the future at this point in time.

May also be worth considering whether the grandparents are going to keep shaking the money tree in his direction in years to come. If this is the first of many substantial gifts, it may make sense to use it for the intended purpose, if a house deposit will be more forthcoming if there isn’t money set aside for that.

johannis

Thank you, that rather confirms my thinking. It feels better to put that away for a while and let it build a bit of interest and see where we are.

i appreciate your time.