College/ university ... What's the best way of funding it?

[tina3747]

After reading another thread in GC I was astounded to know they recommend saving $2000 per month in the US for their kids to go to college. I'm sure this figure is exaggerated as I can't imagine the average family being able to put that amount of money away for near on half of their working lives .
I was thinking about how we do it here in the UK, there's no savings or funds the majority of the time, people entering university apply for loans but end up in a ridiculous amount of debt. The only consolation is getting a job that's well paid enough to be able to pay it off. You don't have to pay anything until your earning a certain amount and the average dept for Uni grads is £20-53k depending on the year you started.
Should we as UK parents be putting money away for college funds like the US now to save our kids a lifetime of debt or thinking they've chosen to go to university and will have the job that's capable of earring enough to pay the loans back?
Any Uni grads with huge debts still?

 

[lindseymw]

We do have savings for the kids but it's not necessarily for Uni fees. It will be upto them what they spend it on (within reason of course). I'd rather save up to help with a deposit on a house tbh.

It's hard to say how much you would need to save up with Uni, who knows what it will cost in 16-20 years time.

For me, my parents never saved up for me to go to Uni. I think I appreciated going more because I knew I was paying for it myself. (Only went for a year though due to a surprise pregancy!)

 

[Andypanda6570]

It depends on the college. If you go away most colleges are 40,000 per year that does not include books and miscellaneous stuff . My son goes locally and it is 6000 per year which is nothing really, he took out loans and when he graduates he will owe 24,000 which we will pay. he doesn't know we will pay it, we want him to do this on his own and be responsible for his education and then we he graduates we will cover the cost. I can't afford to send any of my kids to a college for 40,000 per year they would have to take out loans which they would end up owing probably close to 100,000 thousand when they graduate , which i feel is ridiculous. All my son's friends that went away only lasted 1 year and then came back home and went to school here ,the education was/ is the same the only difference was the money. these kids graduate with so much debt that it will take them forever to pay off. I wish to god I started a college fund for them when they were born but we didn't, it is a great idea to do this. You have to remember when you pay back the loan the interest is ridiculous, my neighbor is 31 yrs. old and owes 70,000 still and his minimum payment is $280.00 a month and that goes to interest only, he says he will take out a second mortgage pay the loan and the interest on the 2nd mortgage would be less . All that money he owes and he makes about 70,000 per year and has a baby on the way. If you can afford it great if not the schools locally are the same the same education only less. If I could do it all over I would definitely have started a college fund for my boys

 

[Piper84]

I won't be saving for my kids to go to uni because I hope they've sorted out this mess by then. I like to think that the situation in the UK will never be as extreme as it is in the US.

I also think it's a mistake to think uni is the best option for my kids. Maybe they want to do a vocational course or an apprenticeship when it comes down to it.

 

[staralfur]

I'm not sure how it works in the UK but here the plans are applicable to any post-secodary education institute, whether that be university, college, trade school, etc. You're saving for any and every form of higher education.

As I said in the other thread I think it's a wonderful idea to put even a small amount per month aside for your child's education. Just by saving a little, you're eligible for government grants and accumulating interest (again, I can only speak for how it works here).

So, so worth it IMO.

 

[Natsku]

I still have all my uni debt, no idea how much it is now but I was lucky to go before they put the fees up.

I think its a good idea to save some money for your children for paying uni fees or so they don't have to take out a loan (although its all free here so I don't need to do that for Maria but I hope to save money for her anyway as the student stipend is never enough to live on)

 

[xemmax]

I would actually encourage them to apply for the loans as it is 'good' debt. It doesn't affect your credit rating, the repayments are small in relation to the amount borrowed and any remaining sum is written off after 25 years so you aren't saddled with debt for life. If anything I would like to be able to afford their tuition fees alone although to be honest, now that the average degree costs £27,000 in tuition fees alone, I'd much rather be able to offer that amount towards the deposit on their first home as I feel it is a better option.

BUT I am disgusted with the rise in tuition fees. It pisses me off to know that my next year (PGCE) will cost the equivalent of my degree which took 3 years. I don't know how they can possibly warrant charging so much.

 

[Button#]

I won't be saving towards my son's uni education (if he goes). I agree with the pp that the student loans are not the same as normal debt. It doesn't affect your chances of getting a mortgage or affect your life negatively.

I still have my student loan and I'm not paying anything as I am a SAHM and I don't know if I'll ever pay it off. I think it's good that tuition fees can be paid afterwards now as when I went you had to pay the fees up front and although they based it on my parents salaries they couldn't afford it so I had to pay for it out of my loan and I ended up running out and having to get a credit card so more student loan debt would have been preferable.

 

[staralfur]

I wish it was like that here. Student loans affect your credit and you have a year after graduation to start making payments regardless of if you've found work or not. Not ideal.

 

[tentoes92]

I had enough scholarships from my state and outsider foundations to cover almost all of my expenses last year. Including room and board books tuition and miscellaneous fees It was about 20000 for the year and I only ended up paying 500$ out of my own pocket. My mom never had any savings for me.

 

[Pearls18]

My student debt is £20,000 for my undergrad which I will start paying back in August after my pay rise taking me over the threshold (I'm only part time) but my postgrad debt is a £6000 career development loan I have to pay back from November 2014 despite my income. I have a job in my field so it is worth it, I don't stress about it (well maybe the post grad debt a little!). I don't class my student debt as debt for some reason lol. My parents helped me when I was at uni with living costs (pocket money type thing) but not my fees, which is what they could afford.

I won't be saving up for university for our children, firstly it would be too expensive!! Secondly, I also don't think uni is the be all and end all for everyone, my husband never went and he's got a thriving career, so I don't want to pressure them into thinking they have to go. I will try to have savings for them but not necessarily for uni. My parents provided really well for me growing up, including my driving lessons and first car but they stopped at uni fees and I think there's fair enough, it's my career after all so il be doing the same (unless we do become significantly better off!)

 

[Andypanda6570]

My student debt is £20,000 for my undergrad which I will start paying back in August after my pay rise taking me over the threshold (I'm only part time) but my postgrad debt is a £6000 career development loan I have to pay back from November 2014 despite my income. I have a job in my field so it is worth it, I don't stress about it (well maybe the post grad debt a little!). I don't class my student debt as debt for some reason lol. My parents helped me when I was at uni with living costs (pocket money type thing) but not my fees, which is what they could afford.

I won't be saving up for university for our children, firstly it would be too expensive!! Secondly, I also don't think uni is the be all and end all for everyone, my husband never went and he's got a thriving career, so I don't want to pressure them into thinking they have to go. I will try to have savings for them but not necessarily for uni. My parents provided really well for me growing up, including my driving lessons and first car but they stopped at uni fees and I think there's fair enough, it's my career after all so il be doing the same (unless we do become significantly better off!)

I agree. My husband barely graduated High-School and he makes over $150,000 a year I am not trying to say college isn't worth it but some people are just not college material and still thrive in the world. If you look at some of the richest people in the world most of them barely went to high school .My second son 19 wants to go into the Fire Department of New York but you need 2 yrs of college for that , he will finish 4 yrs but take the Fire Man test at his second year of college. My older son is definitely NOT college material, he is 21 owns his own pizzeria and runs it like a tyrant ,LOL. But he is wiz in business , my third son is only 12 we call him the little professor he is so smart ,but hates school. He should be a lawyer cause he never shuts up..

 

[Pearls18]

My student debt is £20,000 for my undergrad which I will start paying back in August after my pay rise taking me over the threshold (I'm only part time) but my postgrad debt is a £6000 career development loan I have to pay back from November 2014 despite my income. I have a job in my field so it is worth it, I don't stress about it (well maybe the post grad debt a little!). I don't class my student debt as debt for some reason lol. My parents helped me when I was at uni with living costs (pocket money type thing) but not my fees, which is what they could afford.

I won't be saving up for university for our children, firstly it would be too expensive!! Secondly, I also don't think uni is the be all and end all for everyone, my husband never went and he's got a thriving career, so I don't want to pressure them into thinking they have to go. I will try to have savings for them but not necessarily for uni. My parents provided really well for me growing up, including my driving lessons and first car but they stopped at uni fees and I think there's fair enough, it's my career after all so il be doing the same (unless we do become significantly better off!)

I agree. My husband barely graduated High-School and he makes over $150,000 a year I am not trying to say college isn't worth it but some people are just not college material and still thrive in the world. If you look at some of the richest people in the world most of them barely went to high school .My second son 19 wants to go into the Fire Department of New York but you need 2 yrs of college for that , he will finish 4 yrs but take the Fire Man test at his second year of college. My older son is definitely NOT college material, he is 21 owns his own pizzeria and runs it like a tyrant ,LOL. But he is wiz in business , my third son is only 12 we call him the little professor he is so smart ,but hates school. He should be a lawyer cause he never shuts up..

Exactly, I hate this culture of everybody going to uni not even thinking abut what they want to do beforehand. It is completely de-valuing the degree and is not doing the employment market any favours, I think it's just hard because who really knows exactly what they want to do at 18, not too many people I don't think. In some respects uni is just becoming extended education but for a lot of people I don't think it's actually improving their job prospects, but then I don't think a lot of students know that a BA is not enough with so many graduates these days especially if you're doing something generic like the humanities, you have to do work experience on the side, I spent 3 years volunteering alongside my degree as I knew a BA wasn't going to get me anywhere alone! If I didn't need a degree I wouldn't have gone to uni for sure! Especially the masters, bloody expensive!!

 

[MommyJogger]

We will not be saving any money specifically to put our kids through college. DH and I both went for free on scholarships; if our children want to go, they'll have to work hard and do the same. There are way too many mediocre students going to college nowadays-- THAT is what's devaluing the degrees. A college degree should mean you're extremely qualified in your field-- and programs should be rigorous enough to reflect that. Someone making C's in high school should not be getting into a university, much less be allowed to major in nursing or education. Nurses and teachers should be some of our highest qualified people (and they pay/benefits should match that), but so many of the students that passed through my classroom lacked even the most basic grasp of simple scientific concepts (and sometimes common sense). The same girl that couldn't do serial dilutions and frequently broke our glass petri dishes just recently got a job as a nurse at a hospital in a neighboring city-- makes me wonder about the quality of care at our local one, which I'm sure is also full of PSU grads.

 

[Pearls18]

We will not be saving any money specifically to put our kids through college. DH and I both went for free on scholarships; if our children want to go, they'll have to work hard and do the same. There are way too many mediocre students going to college nowadays-- THAT is what's devaluing the degrees. A college degree should mean you're extremely qualified in your field-- and programs should be rigorous enough to reflect that. Someone making C's in high school should not be getting into a university, much less be allowed to major in nursing or education. Nurses and teachers should be some of our highest qualified people (and they pay/benefits should match that), but so many of the students that passed through my classroom lacked even the most basic grasp of simple scientific concepts (and sometimes common sense). The same girl that couldn't do serial dilutions and frequently broke our glass petri dishes just recently got a job as a nurse at a hospital in a neighboring city-- makes me wonder about the quality of care at our local one, which I'm sure is also full of PSU grads.

So true, in the UK higher education is essentially just a business now, universities (although not all) are lowering their standards just because they want the tuition fees. We have this system called clearing which basically after results day means students who dont get into their first choice can ring around asking other universities if they will take them, fine if they are good enough for that university I guess, but the universities lower their intake requirements to fill courses. Not right if you ask me.

 

[rubydoo1]

I would actually encourage them to apply for the loans as it is 'good' debt. It doesn't affect your credit rating, the repayments are small in relation to the amount borrowed and any remaining sum is written off after 25 years so you aren't saddled with debt for life. If anything I would like to be able to afford their tuition fees alone although to be honest, now that the average degree costs £27,000 in tuition fees alone, I'd much rather be able to offer that amount towards the deposit on their first home as I feel it is a better option.

BUT I am disgusted with the rise in tuition fees. It pisses me off to know that my next year (PGCE) will cost the equivalent of my degree which took 3 years. I don't know how they can possibly warrant charging so much.

Exactly this ^^^ the debt isn't a bad debt so I would rather use any savings for a deposit for a house etc rather than for university. I've got debt from university as does my OH, it has no effect on our lives, I don't currently pay any back as I don't earn enough and OH pays back £50 per month.

 

[staralfur]

Seriously so jealous! I pay $100/month on interest and then the payments go up again once I'm finished school.

 

[Sarahkka]

We have a very good government grant plan to encourage education savings (you can put up to $2500/year/child and the government matches 20% of that), so we take full advantage of that. Hopefully, the investments will mean that there is a big chunk of cash for our boys when they go to school.
Not because I don't think they should work hard for their own education, but because the projected tuition increases will put books and tuition alone at over $130k by the time my kids hit college. I don't care if they want to go to trade school or do a PhD. I want them to have a choice. A choice that isn't dictated solely by the fact that no summer job in the world is going to get them through an education that expensive. It's apples and oranges to what I paid to go to school. You don't shovel yourself out from $130k of debt for a long time. I am very worried that this will result in far fewer kids having access to education. I find it quite concerning.

 

[TwilightAgain]

I'm very fortunate that I don't have any uni debts because my Dad paid my fees for me because he didn't want me to be in any debt......now that we've had a rethink, he thinks he's made a big mistake because that money probably would have been better off being put towards a house......so for that reason, whilst its nice knowing that I don't have anything to pay back once I finish my degree, it is stressful knowing I have to save up for a deposit for a house, therefore my vote would go towards letting student loans take care of the degree and if parents wish to help their kids then help towards a deposit for a mortgage. Though I am very very grateful for all of his help

 

[Sarahkka]

I'm very fortunate that I don't have any uni debts because my Dad paid my fees for me because he didn't want me to be in any debt......now that we've had a rethink, he thinks he's made a big mistake because that money probably would have been better off being put towards a house......so for that reason, whilst its nice knowing that I don't have anything to pay back once I finish my degree, it is stressful knowing I have to save up for a deposit for a house, therefore my vote would go towards letting student loans take care of the degree and if parents wish to help their kids then help towards a deposit for a mortgage. Though I am very very grateful for all of his help

I think your dad made a great choice! Two reasons:
1) it is much easier to pile up savings than dig out of debt
2) he invested in your earning potential and helped to give you the skills you need to earn the money for a house by yourself. Far more valuable, I think.