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    • Sportacus
    • By Sportacus 15th Jan 19, 3:35 PM
    • 162Posts
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    Sportacus
    Paying tuition fees upfront
    • #1
    • 15th Jan 19, 3:35 PM
    Paying tuition fees upfront 15th Jan 19 at 3:35 PM
    Hi,

    My parents have offered to pay for my kids university tuition fees, because they want to and can't stand the idea of them starting out in so much debt, although they will still need a maintenance loan.

    Wondering how the mechanics of this work, is it better to pay the university directly, or take the tuition fee loan and pay it off before any interest can get charged?
Page 1
    • CakeCrusader
    • By CakeCrusader 15th Jan 19, 3:48 PM
    • 975 Posts
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    CakeCrusader
    • #2
    • 15th Jan 19, 3:48 PM
    • #2
    • 15th Jan 19, 3:48 PM
    Interest is usually charged from the moment a student loan hits the students bank account so this may not be a good idea. Universities often offer a discount if fees are paid in advance, you can always ask anyway.



    It's really nice of your parents to want to help out!
    • Flugelhorn
    • By Flugelhorn 15th Jan 19, 3:51 PM
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    Flugelhorn
    • #3
    • 15th Jan 19, 3:51 PM
    • #3
    • 15th Jan 19, 3:51 PM
    there is the question about whether you are likely to ever pay it off? Most students won't.
    I could have afforded to pay the fees but opted to pay the accommodation for kids instead, they were in an expensive town and the maintenance loan would never have covered it
    • silvercar
    • By silvercar 15th Jan 19, 5:04 PM
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    silvercar
    • #4
    • 15th Jan 19, 5:04 PM
    • #4
    • 15th Jan 19, 5:04 PM
    This is a really bad idea.

    If your children have average to above average earnings in the future, they could well pay the same total amount irrespective of whether your parents pay their tuition fees!

    Your children will pay 9% of their income above a set level irrespective of whether they borrowed 20k or 40k. If they don't pay enough to clear their loan by the time the loan is cancelled, then the rest is written off. So your parents kind gesture will just mean that they have less written off. Effectively your parents will just be giving money to the government.
    • Sportacus
    • By Sportacus 16th Jan 19, 7:21 AM
    • 162 Posts
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    Sportacus
    • #5
    • 16th Jan 19, 7:21 AM
    • #5
    • 16th Jan 19, 7:21 AM
    Yes, I've looked into the repayment terms and agree that much of it could well end up as a gift to the government. I wish I'd had a chance to show them Martin's analysis before they told my kids they would pay these fees, perhaps they could help them in other ways. As for maintenance, I can afford 350 a month, wondering how much maintenance loan they would likely need assuming they go to an average priced uni-town.
    • silvercar
    • By silvercar 16th Jan 19, 9:31 AM
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    silvercar
    • #6
    • 16th Jan 19, 9:31 AM
    • #6
    • 16th Jan 19, 9:31 AM
    Yes, I've looked into the repayment terms and agree that much of it could well end up as a gift to the government. I wish I'd had a chance to show them Martin's analysis before they told my kids they would pay these fees, perhaps they could help them in other ways. ...
    Originally posted by Sportacus
    Show them this article:
    https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/

    Suggest they put the money in a savings account to be used as a deposit on first home, or they could feel more engaged by drip feeding it into a help to buy ISA in the kid's name.

    .... As for maintenance, I can afford 350 a month, wondering how much maintenance loan they would likely need assuming they go to an average priced uni-town.

    To a certain extent that depends on how much loan they get given based on your household income. Martin Lewis has an article on what the government assumes you can contribute, I can't find it now . See next post for link

    Roughly speaking, if your offspring only get the non means tested element, then 350 a month may be about right as a top up. Alternatively, you could pay their rent and let them use their loan to live off.
    Last edited by silvercar; 16-01-2019 at 12:31 PM.
    • silvercar
    • By silvercar 16th Jan 19, 12:30 PM
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    silvercar
    • #7
    • 16th Jan 19, 12:30 PM
    • #7
    • 16th Jan 19, 12:30 PM
    Here is the article that Martin Lewis wrote on what the government assumes that parents contribute:

    https://blog.moneysavingexpert.com/2016/09/how-much-are-parents-supposed-to-give-their-children-when-they-go-to-university/
    • Sportacus
    • By Sportacus 8th Sep 19, 11:52 AM
    • 162 Posts
    • 43 Thanks
    Sportacus
    • #8
    • 8th Sep 19, 11:52 AM
    • #8
    • 8th Sep 19, 11:52 AM
    Decided to put the money into some form of savings account for my son. Is there any kind of account that can be opened or bonds that can be purchased in someone else's name? Trying to avoid paying all the money into my sons current account and needing him to open the investment. Easier if it's possible just to buy some 4 year fixed term bonds and transfer to his name?
    • DaveBullock_
    • By DaveBullock_ 16th Sep 19, 3:18 PM
    • 17 Posts
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    DaveBullock_
    • #9
    • 16th Sep 19, 3:18 PM
    • #9
    • 16th Sep 19, 3:18 PM
    That is very kind of your parents!

    I would probably advise against it however, unless your child comes out of university and lands a job that is over 24k they wont see a reduction in what they earn. You are effectively just paying the government - and once they do earn above 24k they only take small amounts out of the wage packet but i personally would go against paying it upfront.
    • meer53
    • By meer53 16th Sep 19, 8:09 PM
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    meer53
    350 per month may be enough, it may not, it all depends on lots of factors. Where the Uni is, how much accommodation is, it varies massively from Uni to Uni. It can be as little as 80 a week to 190 or even more. Will they choose catered halls or non catered, en suite or shared bathrooms ? There was a difference of 1200 a year for an en suite room at my daughters Uni last year !!! I managed to talk her out of it !
    Will they need to travel to Uni or will they stay on Campus ? For their second year, accommodation costs will probably rise as most move away from Halls to rented houses.

    If I had grandparents who were willing to help I would ask them to help out with living expenses rather than Tuition Fees.
    • tyllwyd
    • By tyllwyd 18th Sep 19, 10:37 AM
    • 5,415 Posts
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    tyllwyd
    Roughly speaking, if your offspring only get the non means tested element, then 350 a month may be about right as a top up. Alternatively, you could pay their rent and let them use their loan to live off.
    Originally posted by silvercar

    My daughter only gets the non-means tested element, so we pay rent and let her have the loan for living costs. But the rent is closer to 500 per month, and she struggles to make the loan last over 52 weeks without a part-time job. When you are doing your budget, I think you have to assume they will need the full amount of the maintenance loan (or maybe more) for rent & living costs.
    • notclover
    • By notclover 2nd Oct 19, 9:28 AM
    • 8 Posts
    • 0 Thanks
    notclover
    I sort of have a similar concern, really glad I saw this thread. Thanks for all the helpful replies and the links!
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