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View Full Version : Parents of Students - tell me about loans


Dimplenose
02-19-2009, 01:37 AM
DS is now in the final throws of choosing his university for next year. We thought we'd be able to support him but had underestimated how much it all costs!

He'll need to get a loan, for his fees at the very least, that we plan to pay off for him within a couple of years of him graduating but I cannot find any info on the interest charged on these loans. I've heard rumours of it being interest free and also of it being charged at the rate of inflation. (The info on the government website is obscure to say the least!)

So has anyone got any practical info on repaying their child's loan?

snookhams
02-19-2009, 02:20 AM
I too would be interested in this - DS is only in y12 at the moment but he is already looking at uni's - he is also considering going abroad in particular US - can you get loans to help here as well!!! hopefully he might get a swimming scholarship which would help greatly

CustardTart
02-19-2009, 02:51 AM
Both of my children obtained student loans and are repaying them themselves directly thro' their pre-tax salary. They had a short period of grace and then started paying off the debt as they earned over the 15k limit - the interest payable is usually the rate of inflation. You can pay it off more quickly but it's hardly worth it...

In real terms, my daughter pays a monthly amount that is slightly less than her NI contributions and has repaid about 30% of the loan after 18 months tho' she was on a 4 year course so has more to repay. Sophie's a big fan as she liked having a little financial independence from us. Plus it meant she could concentrate on her studies in the final two years of her degree and cut back on her part-time job hours. In her view, it's really not worth not taking the loan as it's obviously cheaper than piling debt on credit cards and it's paid off pre-tax in a way you hardly notice. Actually, I shall be taking out one myself now I've remembered about it... :thumbsup2

wishspirit
02-19-2009, 02:54 AM
Hi I am a current Uni student. You can take out 2 kinds of loans- Tuition Fee and Maintance. Your tuition fee can be for the maximum of (currently) 3225 . HOWEVER they are currently thinking about taking the cap off, which means they could go up to 7000!!! :scared1:
Maintance loan is to support you while you are there, and is totally dependant on what you earn. Terrible system as it assumes your parents will help you out. The numbers are: Studying in London (which i think is unfair, I am paying the same amount in rent as many other people in London, but not living there) and away from home: Max of 6,643. Studying elsewhere and living away: Max 4745. Living at home: Max 3,673.

Make sure you budget this loan with him!! Even the best students can go off the rails with money by not having a budget.

You can also get grants and burseries from both the government and the university dependant on means, and if they are the first person to go to uni in your family.
The student finance website says the current rate of interest on the loan is 2%. However the great thing about the government loan is that it is automatically paid back out of your pay check, when you start earning over 15,000 a year, which means you don't even really see it go. Its the student overdrafts you have to be wary about.

I would really suggest going to www.directgov.org/studentfinance as it breaks it down really well. All I have said depends on him being English and going to an English university, not anywhere else in Britain, as things start to change.

tennisfan
02-19-2009, 03:05 AM
I assume its still the case that the maintenance loan is paid is 3 installments at the beginning of each new term. That was the case when I was at uni.

The only annoying thing regarding the interest is that they only review it twice a year, I think March & September. This means people who already have the loan have to wait till March to get a lower interest rate. I think the ruling is that the rate will never be more then 2% of the Bank of England base rate.

Lizzybear
02-19-2009, 04:12 AM
IMO it's a good idea to take the maintenance loan whether it's needed or not.. If you don't need it stick the money in an ISA or similar and gain some interest then just pay the initial loan back (obviously the person doing this would have to quite disciplined financially!) If the loan is needed or will be in the near future then the interest rate is much lower than pretty much any private provider could offer so it's really worth taking advantage of whichever way you look at it. Me and my bf both took out maintenance loans and he earns enough to have the payments taken out every month but as Karen said it's hardly noticeable :)

jen_uk
02-19-2009, 04:14 AM
I took out loans and now I pay it back directly from my wages, I earn approx 25K and they take about 50 a month so its hardly noticeable. One thing I will say though is that it is perfectly possible to work and do a degree at the same time, when I did mine I was only in classes for between 9-14 hours a week! I had a part time job which covered all of my living expenses and I can honestly say it didn't affect my studying or student life at all.

Dimplenose
02-19-2009, 04:28 AM
I was in a very lucky position when I was a student with no fees and a full grant and I've always wanted to give DS and DD the opportunity to get a degree without getting into debt of any sort.

DS knows that we can only just afford to do this and is saving up from his current part time job to give him some extra money while he is away, and is also planning to find some part time work when he is at university.

We went to an open day yesterday and I was stunned at the hall of residence fees - and for the legth of contacts (I'm sure I only paid during term time) which also bump the cost up. We'd expected him to get a little in the way of a non repayable grant but the parental earnings threshold has been dropped by nearly 10,000 and now only just prevents him from claiming.

How much do students spend on food etc., as as I far as I can see the maintainence loan would barely cover the hall fees?

Clare D
02-19-2009, 04:31 AM
I work at a University in the bursary team and we are advising students for the 09/10 academic year to start applying as soon as possible to the student loan company. As yet I don't think you can do it but the online applications will open shortly through the SLC.
As well as the SLC loans the university may offer some assistance financially depending on whether or not a full undergraduate course is being applied for. If an HND then some assistance may still be possible. They tend to look at postcodes, whether or not they have come from a school/college that the uni has a relationship with and household income. These bursaries are not repayable and will be paid each year to the student (as long as circumstances haven't changed) and normally paid in installments.

wishspirit
02-19-2009, 05:26 AM
How much do students spend on food etc., as as I far as I can see the maintainence loan would barely cover the hall fees?

Mine only just covered my hall fees in my first year (circumstances have changed since then), used a mixture of money I made in the holidays,my student overdraft, my savings and being careful with my money to see me through. Its hard though!

Where's your son thinking of going? Some places are more expensive than others.

Dimplenose
02-19-2009, 06:00 AM
!

Where's your son thinking of going? Some places are more expensive than others.

He's very keen on Coventry. It seems O.K. to me, I'm just a bit worried that their entry requirements are a lot lower than his predicted grades. I thought he'd choose it as his insurance choice.

CustardTart
02-19-2009, 06:21 AM
...One thing I will say though is that it is perfectly possible to work and do a degree at the same time, when I did mine I was only in classes for between 9-14 hours a week! I had a part time job which covered all of my living expenses and I can honestly say it didn't affect my studying or student life at all.

I think it depends on the course, Jen. My DD could just about work part-time in the first couple of years tho' she had loads of language classes. Her year in Paris was very intense and almost full-time plus the dissertation in her final year took care of weekends. She was able to temp during the hols and save some cash... My DS did Fine Art and Animation and really didn't have time for regular part-time work from the start. He managed to do some modelling which gave him chunks of cash from time to time...

All I know is it was VERY expensive have 2 kids at Uni at the same time and we were really, really shocked... :sad2:

BTW I do about those hours you mention but spend double that on preparation and study - tho' that's probably because I'm old... ;)

tennisfan
02-19-2009, 11:44 AM
IMO it's a good idea to take the maintenance loan whether it's needed or not.. If you don't need it stick the money in an ISA or similar and gain some interest then just pay the initial loan back (obviously the person doing this would have to quite disciplined financially!) If the loan is needed or will be in the near future then the interest rate is much lower than pretty much any private provider could offer so it's really worth taking advantage of whichever way you look at it. Me and my bf both took out maintenance loans and he earns enough to have the payments taken out every month but as Karen said it's hardly noticeable :)

In theory this is a good idea, however ISA interest rates are extremly poor. My one was 6% in April (one of the best on offer) it was 3.5% last week. So there isn't much difference so the interest earned would be next to nothing.

I was fortunate to be able to work paqrt time throughout my degree. Supermarkets are the most flexible when it comes to hours.

Lizzybear
02-19-2009, 03:45 PM
In theory this is a good idea, however ISA interest rates are extremly poor. My one was 6% in April (one of the best on offer) it was 3.5% last week. So there isn't much difference so the interest earned would be next to nothing.

I was fortunate to be able to work paqrt time throughout my degree. Supermarkets are the most flexible when it comes to hours.

I haven't looked into it in much depth (an ISA was just the first one that came to mind!) as I actually had to use mine for living expenses but MSE has a good page about student loans and the best accounts to invest in but this bit in particular relates to taking it even if you don't necessarily need it:
http://www.moneysavingexpert.com/health/student-loans#maximum
I agree though it's a shame from a saving point of view that the interest rate has been lowered.

wishspirit
02-19-2009, 03:51 PM
I was fortunate to be able to work paqrt time throughout my degree. Supermarkets are the most flexible when it comes to hours.

Have you tried to get a job in a supermarket recently?? That's the worrying thing, jobs are very thin on the ground, some students are really struggling.

I don't have a term time job, I just work my butt off in a job over the holidays.

MaddieB
02-19-2009, 04:08 PM
We went to an open day yesterday and I was stunned at the hall of residence fees - and for the legth of contacts (I'm sure I only paid during term time) which also bump the cost up. We'd expected him to get a little in the way of a non repayable grant but the parental earnings threshold has been dropped by nearly 10,000 and now only just prevents him from claiming.

How much do students spend on food etc., as as I far as I can see the maintainence loan would barely cover the hall fees?


Residence fees vary a lot between and within universities. At my uni we can choose between different priced halls from around 60 to 110 a week including bills. Some residences are term-time only lets and others included the christmas and easter hols.

I usually spend about 15-20 a week on food but its very easy to spend a lot more each week if you eat out (especially if you buy lunch on campus). Other costs to consider are textbooks (I spend about 200-300 a year on these) and about 30-40 a week on other stuff. Hope this helps.

Frances999
02-19-2009, 05:58 PM
One thing I will say though is that it is perfectly possible to work and do a degree at the same time, when I did mine I was only in classes for between 9-14 hours a week!

That isn't necessarily true. University is about independent study and reading as well as the set classes, lectures and tutorials - some people take much longer working and digesting the material sufficiently - everyone has different working patterns and not everyone can deal with the pressure of a full time degree coupled with a part-time job. In addition, having a part-time job is positively disallowed at certain top universities (Oxford, Cambridge, LSE(?) to name but a few). IMHO use of the student loan, maintenance grant (if applicable), and parental support should see students through without the need for employment during term-time. Extra money via part-time employment can easily be made in the holidays.

wishspirit
02-19-2009, 06:08 PM
I usually spend about 15-20 a week on food but its very easy to spend a lot more each week if you eat out (especially if you buy lunch on campus). Other costs to consider are textbooks (I spend about 200-300 a year on these) and about 30-40 a week on other stuff. Hope this helps.

Your budget is a lot different from mine! With rising food prices I am lucky if my weekly shop is less than 30, that is including fruit and veg though! :rotfl:
I don't spend nearly as much on textbooks. In fact I think it has been 30 whole year thus far, but my uni is big on having everything online, so I spend on printing! I am good at keeping my incidentals low, but now I am in second year and off campus you need to take into account higher rent (yes higher in my area) and travelling costs. A night out or two can really set you back if you aren't keeping an eye on your spending!

tennisfan
02-20-2009, 11:03 AM
Have you tried to get a job in a supermarket recently?? That's the worrying thing, jobs are very thin on the ground, some students are really struggling.

I don't have a term time job, I just work my butt off in a job over the holidays.

I have just left my supermarket job last week after 9 years. We were nearly always recruiting for different departments. I'm leaving for a new job which doesn't require a degree so I feel like I have wasted 3 years at the moment.

tennisfan
02-20-2009, 11:06 AM
That isn't necessarily true. University is about independent study and reading as well as the set classes, lectures and tutorials - some people take much longer working and digesting the material sufficiently - everyone has different working patterns and not everyone can deal with the pressure of a full time degree coupled with a part-time job. In addition, having a part-time job is positively disallowed at certain top universities (Oxford, Cambridge, LSE(?) to name but a few). IMHO use of the student loan, maintenance grant (if applicable), and parental support should see students through without the need for employment during term-time. Extra money via part-time employment can easily be made in the holidays.

Regarding this the rule of thumb usually set by unis is to sepnd the same amount of time studing out of lectures as you do in. So if you only have 9 hours of lectures another 9 over a week can easily mean getting a job for a few hours a week. I jbow not all degrees are like this. I managed it when I was at uni & I had a lot of work to do outside of contact time at uni, especially for my final year due to the nature of my degree.

hildasmuriel
02-20-2009, 01:30 PM
http://www.timesonline.co.uk/tol/life_and_style/education/student/article4523064.ece

When I read this the other week I nearly fainted. :scared1: In particular: the average student in Exeter spends 294 per week and: the research indicates that the cities with highest weekly living costs (excluding rent) are London (221) and Leicester (220)

I know people in full time work who don't spend 220 per week after rent! Where on earth do these students get this money?

I asked some of the younger teachers in work (newest graduates) and they said these figures were poppycock.

I certainly hope so. I figured there would be no more Disney tickers if my son makes it to Uni in October. I didn't realise there would be no more food for any of us either.

gemmybear83
02-20-2009, 01:50 PM
Hi I did a three year degree and 1 year postgrad qualification (needed for my profession) at Sheffield University living away from home between 2001-2005. I was fortunate that my parents paid my fees (this was in the good old days when they were about 1,500 a year and set at a national rate) and recieved 200 a month from my parents. I paid my accomodation fees from my student loan and worked part time during uni semesters and full time during the holidays.

I would recommend your son having a part time job (I know its not easy at the moment!), not only for the money, but you do pick up transferable skills that will be looked at favourably by future graduate employers and I think its important to get out of that "uni bubble". I worked part time for the student union in their shop (this was great as they were very flexible with hours), and for the last two years managed to geta job in my profession - which helped me greatly when it came to graduate recruitment.

In terms of living costs, university self catered halls are often a lot cheaper than catered ones. I lived this way during the first year and much prefered it as I was able to eat what I liked and when - and I saved a lot of money living this way.

As well as looking at the obvious uni reputation its worth looking at average rents at universities and job opportunites. This is a good guide I used http://www.amazon.co.uk/Virgin-Alternative-Guide-British-Universities/dp/0753512238/ref=sr_1_2?ie=UTF8&s=books&qid=1235161900&sr=8-2. If your son is looking at a campus university it is much more difficult to find a part time job than a university in a city.

I manged to do 4 years without an overdraft, and now pay back my 12,000 student loan debt monthly at a rate of approx 140.00 a month - but this based on you salary.

Hope this is of help :)

Dimplenose
02-21-2009, 03:44 AM
Thanks for all your input it given us lots to think about.

I'm just glad that this time last year I didn't know how much this would all cost or I'd never have committed to a WDW holiday this summer!

snookhams
02-21-2009, 11:38 PM
I am shocked at the costs - I hope that DS might qualify for sports funding to help with costs, as due to competitions at weekend and morning and evening training a job would be really difficult to manage with lectures etc. At the moment he is investigating colleges and unis in US, would love to go to Florida state (I wonder why!!!) as there swim teams specialise in backstroke which is his first stroke. He has a small amount of sponsorship at the moment so hopefully this would continue, it has helped greatly with the increasing costs of training at least - this would not be a factor if he made a uni team

gemmybear83
02-22-2009, 05:06 AM
I am shocked at the costs - I hope that DS might qualify for sports funding to help with costs, as due to competitions at weekend and morning and evening training a job would be really difficult to manage with lectures etc. At the moment he is investigating colleges and unis in US, would love to go to Florida state (I wonder why!!!) as there swim teams specialise in backstroke which is his first stroke. He has a small amount of sponsorship at the moment so hopefully this would continue, it has helped greatly with the increasing costs of training at least - this would not be a factor if he made a uni team

My cousin is at university in the US - and is on an athletic sponsorship as she plays girls football, she is studying to be a physiotherapist. she loves it - the only problem is if you get injured or your performance drops off you can lose your sponsorship.

CustardTart
02-22-2009, 05:27 AM
I am shocked at the costs - I hope that DS might qualify for sports funding to help with costs, as due to competitions at weekend and morning and evening training a job would be really difficult to manage with lectures etc. At the moment he is investigating colleges and unis in US, would love to go to Florida state (I wonder why!!!) as there swim teams specialise in backstroke which is his first stroke. He has a small amount of sponsorship at the moment so hopefully this would continue, it has helped greatly with the increasing costs of training at least - this would not be a factor if he made a uni team

I wish him all the luck with that - such a great experience!!!:thumbsup2 My DD looked into University in the US but the cost was crazily prohibitive (circa $30k pa when she looked) as international students weren't eligible for funding and there were conditions on the student visa which made working difficult - this was few years ago tho'...

My cousin is at university in the US - and is on an athletic sponsorship as she plays girls football, she is studying to be a physiotherapist. she loves it - the only problem is if you get injured or your performance drops off you can lose your sponsorship.

There you go!!! I thought our experience might be outdated - plus we weren't looking at it from a sporty angle... ;)

wideeyes
02-23-2009, 02:53 AM
My sister supports her self completely at uni with grants, loans and she works a few nights a week at a supermarket. She pays for her halls, books, food, going out etc.

I took the student loans due to the low intereset as it paid towards my DVC:rotfl: