Take a student loan or pay fees?

sadders
sadders Posts: 20 Forumite
in Loans
My daughter is looking to start university next years.

There have been investments in her name over the years and an inheritance that could pay her fees and living expenses.

Would she be better doing that or should she take out student loans and keep the money back for e.g. for a mortgage deposit in the future?
«1

Comments

  • Herzlos
    Herzlos Posts: 14,682 Forumite
    First Anniversary Name Dropper First Post
    Student loans are the cheapest credit she'll likely ever get - use them first and pay them off from savings/investments whenever you need to.
  • sadders
    sadders Posts: 20 Forumite
    Herzlos wrote: »
    Student loans are the cheapest credit she'll likely ever get - use them first and pay them off from savings/investments whenever you need to.

    Hence the question.

    My wife and daughter would like to pay the fees.

    I think that she will never be able to raise the deposit for a mortgage without this help.
  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
    Given that there's a reasonable chance she'll never repay a student loan I'd suggest borrowing is a good idea.

    I'm sure if you Google "Martin Lewis student loans" you'll find a more rounded explanation to guide your decision.
  • Herzlos
    Herzlos Posts: 14,682 Forumite
    First Anniversary Name Dropper First Post
    sadders wrote: »
    Hence the question.

    My wife and daughter would like to pay the fees.

    I think that she will never be able to raise the deposit for a mortgage without this help.

    Student loans aren't regarded as loans as far as mortgage deposits are concerned, so stick her tuition fees into savings and let her borrow. If you're lucky the gains on the savings with be more than the interest on the loans. This then gives her a deposit, whereas if you pay her fees, she'll have no deposit.
  • tketchup
    tketchup Posts: 1 Newbie
    It is a massive a scam! Have you seen the news lately?

    Taken from the brochure:

    "The regulations may change from time to
    time and this means the terms of your loan may
    also change..."

    There is no such thing as free money! The loans are made by legislation that allows the terms to be changed unfairly against the borrower. A government who makes rules that are non binding on themselves cannot be trusted. Her life could be ruined by having this potentially expensive debt chained round her neck forever without knowing who she might end up eventually owing it to.

    If she absolutely needs a specific degree for a chosen profession then she should pay upfront and have a life of freedom ahead. She could even study overseas and pay much less or choose a fast track 2 year course.

    There are other options in life than university, - apprenticeships (some now pay for degrees part time). armed forces, start a business, etc.

    Rather than asking on a forum, you should consult a contract lawyer. He is likely to advise you of the risks.
  • smithers1981
    smithers1981 Posts: 824 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Take the student loan and use savings towards deposit.
  • jennystiller
    jennystiller Posts: 1 Newbie
    If I were you, I'd take the student loan.
  • Gymbob
    Gymbob Posts: 11 Forumite
    edited 29 November 2017 at 3:50AM
    It more comes down to what job is she looking to do after her degree. 'If' this is something which pays fairy highly I'd consider paying the student loans.

    Student loans are not a 'low rate' as people keep saying they're 6.1% whilst studying and then if you earn a decent amount it remains at 6.1% (over £42,000 I think). But it'll be 6.1% of the total sum.. which will mean you are paying for nothing.. the whole system is a joke
  • adamh87
    adamh87 Posts: 51 Forumite
    First Post Combo Breaker First Anniversary
    Gymbob wrote: »
    It more comes down to what job is she looking to do after her degree. 'If' this is something which pays fairy highly I'd consider paying the student loans.

    Student loans are not a 'low rate' as people keep saying they're 6.1% whilst studying and then if you earn a decent amount it remains at 6.1% (over £21,000). But it'll be 6.1% of the total sum.. which will mean you are paying for nothing.. the whole system is a joke


    This ^^^ is very apt, does your daughter really need to go to university? It's really only worth it financially for Dentists, Doctors, Engineers, Economists, Lawyers (from a credible institution), STEM subjects & anything from Oxbridge.

    Personal opinion: the VFM on a university education was poor a decade ago when fees were £1.5k, now they're £9k and wages haven't improved in that time.

    While many people say it's not proper debt, I can assure you that it feels like proper debt.

    At best a student's volunteering to pay an extra level of tax which you could avoid by starting work at 18, or even giving her a fraction of the £27k to go travelling for a year.
  • Voyager2002
    Voyager2002 Posts: 15,271 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    Another possibility: consider studying in Europe, where tuition fees are minimal or zero. For most people the catch is that if they do this they do not receive a maintenance loan (only available for study in the UK) and so would not have money on which to live while studying. If your daughter has funds for this, the total cost of obtaining her degree will be far less if no tuition fees are payable.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343K Banking & Borrowing
  • 250K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.1K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards