Why do some students' parents pay their tuition fees?

I really don't understand what motivates people to do this. It's completely illogical. Is it because they don't understand how the system for repaying student loans works? I also know someone who wants to use savings to repay a big chunk of her loan when they graduate, and I tried to explain to her why it was a total waste of money, but she didn't understand.

People often say "I wouldn't want that debt hanging over my head..." which is also total rubbish. I just wish people understood the system well enough not to waste their money like this. Does anyone else agree?

Reply 1

username873490

14

you do end up paying less by paying up front than you would if you relayed your loan over the 30 years, due to interest rates...

Reply 2

Guy Secretan

18

because then you have more money for drinking and partying my parents paid my fees but that was when it was only 1000

Reply 3

ooerr

OP

12

Original post by bellatrixb

you do end up paying less by paying up front than you would if you relayed your loan over the 30 years, due to interest rates...

I'd be interested to see how many people repay their loans in full. I wouldn't think it was so bad if the student repaid the money to their parents, why should they pay? It isn't their education.

Reply 4

brendonbackflip

18

I guess if you have the money, it makes more sense to get it over and done with instead of having to pay it off for donkeys years. If my parents had a spare £9000 however, I'd rather they'd just use it for my living costs. Though I don't think they'd want to pay for me getting plastered at every opportunity, perhaps parents who spend it on fees are fearful of it being wasted elsewhere?

Reply 5

Катя

18

A friend of mine is going to some sub-par university in the US with annual tuition fees of $40k or something, and her parents are paying for everything (as well as living costs and "entertainment costs", etc). I found out and asked her why, feeling kind of disgusted but also massively jealous; she said that parents are supposed to look after you and provide for the best education, or something, and that it's just "right" that they do this to the best of their ability.

Sigh. I wish I had that kind of money.

Reply 6

Bronco2012

11

Original post by Guy Secretan

because then you have more money for drinking and partying my parents paid my fees but that was when it was only 1000

You do? Drinking money comes from the maintenance loan, part time work and any living money your parents give you. Them paying you tuition fees up front would have no effect on your alcohol fund.

Reply 7

ooerr

OP

12

Original post by brendonbackflip

I guess if you have the money, it makes more sense to get it over and done with instead of having to pay it off for donkeys years. If my parents had a spare £9000 however, I'd rather they'd just use it for my living costs. Though I don't think they'd want to pay for me getting plastered at every opportunity, perhaps parents who spend it on fees are fearful of it being wasted elsewhere?

It's not like you ever see the money. You pay a set percentage of your salary above £15k/£21k (depending which system you're under...) It has no more of an effect on you than paying income tax and national insurance.

Reply 8

Guy Secretan

18

Original post by Bronco2012

You do? Drinking money comes from the maintenance loan, part time work and any living money your parents give you. Them paying you tuition fees up front would have no effect on your alcohol fund.

well you wouldn't have to use the loan to pay for the fees. Also they paid the accommodation so maybe that's where it came from.

Reply 9

Le Nombre

16

Original post by ooerr

It's not like you ever see the money. You pay a set percentage of your salary above £15k/£21k (depending which system you're under...) It has no more of an effect on you than paying income tax and national insurance.

Yeah, but wouldn't you pay less tax if you could? My housemate's fees were paid by his parents, they were millionaires so it seened daft to them for him to pay the interest when they could pay the fees with spare change.

Reply 10

brendonbackflip

18

Original post by ooerr

It's not like you ever see the money. You pay a set percentage of your salary above £15k/£21k (depending which system you're under...) It has no more of an effect on you than paying income tax and national insurance.

I know how it works, thanks. The point is that you'll see more money if you've already paid off the debts.
I'm not really arguing with this because I don't really see the point in it either. I just don't think its particularly illogical if you do have the spare £9000 floating about.

Reply 11

LukeM90

17

tbh I dont think parents should with all the help thats available, not only that it encourages those who just dont wana go to work yet, or just wana go to uni for "the experience" to go for those reasons

Whereas when its gona put them in debt, they may think twice

also uni is a choice, and if you really want to go, youd be more than happy to put up with the repayments.

That being said if a young person couldnt get financial support then I see why parents might choose to pay, I know I would if my "child" desired to go to uni but could not get funding for whatever reasons, but thats just because I want them to have every opportunity available

which most can get under their own funding.

also one last thing, I think its a pretty good step forward in maturing, having to sort and handle your own finances, even if the money is provided for, its a good practice in the lending and repaying that will undoubtebly follow with life,

buying cars, houses and other grand purchases.

Reply 12

Klix88

17

Original post by Guy Secretan

well you wouldn't have to use the loan to pay for the fees.

The Tuition Fee Loan goes straight from Student Finance to the uni. Students never actually see it.

Certainly if a student has applied for a Maintenance Loan and then finds their parents paying for accommodation, this would free up some entertainment money.

(edited 10 years ago)

Reply 13

ooerr

OP

12

Original post by brendonbackflip

I know how it works, thanks. The point is that you'll see more money if you've already paid off the debts.
I'm not really arguing with this because I don't really see the point in it either. I just don't think its particularly illogical if you do have the spare £9000 floating about.

Yeah, sure. Under the new system, would most people come out with about £42k debt, roughly? With tuition + maintenance? I guess I just don't know many people who wouldn't be out of pocket shelling out 42k over three years :tongue:

Reply 14

Ice_Queen

17

Original post by Guy Secretan

well you wouldn't have to use the loan to pay for the fees. Also they paid the accommodation so maybe that's where it came from.

If you don't want the tuition loan, you still only get the maintenance grant/loan. You wouldn't have 'extra money' lying around to spend on alcohol.

Reply 15

tazarooni89

20

Original post by ooerr

It's not like you ever see the money. You pay a set percentage of your salary above £15k/£21k (depending which system you're under...) It has no more of an effect on you than paying income tax and national insurance.

Of course it has an extra effect. Currently, I'm paying my income tax and national insurance at the same rates as anyone else. But I'm having to make student loan repayments on top of that. If my parents had paid all my tuition fees up front, right now I would have about £200 per month extra to spend.

There are certain circumstances when it might be best to get the tuition fee loan e.g. if you're planning to get a degree but then just marry a rich husband, quit work and be a full time mum for the rest of your life, as many people do. If your parents paid your fees up front in that situation, it would just be a waste of their money.
But assuming you're actually going to be working for a significant amount of time in a job with a high enough salary, if your parents are willing to pay your fees for you, you might as well let them.

Though personally, if I just had £27k of my own lying around, I'd still take out the tuition fee loan rather than paying up front, and use my lump sum as a deposit to buy a flat when I start work, or something like that.

(edited 10 years ago)

Reply 16

tulips17

It is cheaper to pay it upfront. If they have the money, why not pay it then.

Reply 17

9MmBulletz

16

My fees are roughly £3,000 and my parents have paid for all of my other siblings' university costs. My dad had been working for over 30 years, saving money. As well as that he has invested his money in quite a few properties and so has a fair bit of "passive income" as you have it.

Most of my elder siblings now are working in engineering, finance and computing and so on so things have worked out fine for us.

He feels that it's his job to provide opportunities for his children in education and so he does. When I have children, I would like to do the same for them.

Reply 18

Scorlibran

13

Original post by ooerr

It's not like you ever see the money. You pay a set percentage of your salary above £15k/£21k (depending which system you're under...) It has no more of an effect on you than paying income tax and national insurance.

Wrong!

According to http://www.thesalarycalculator.co.uk/salary.php

Assuming a £30k salary

With no student loan take-home pay is: £23,218.60

With the £15k or above repayment plan it's: £21,991.45

With the £21k or above repayment plan it's: £22,408.60

So it does have a little bit more effect that tax or NI, but only a little bit.

Although I do agree that it's stupid for parents to pay it, because like you said it's a large chunk of money over a large period and the repayment method means that they might not even have to pay it all back. On the flip-side if they do pay it all back it'll probably be slightly more, (EDIT) although the interest rate is set at the rate of inflation, so in real terms you pay the same amount back.

(edited 10 years ago)

Reply 19

MagicNMedicine

20

Original post by bellatrixb

you do end up paying less by paying up front than you would if you relayed your loan over the 30 years, due to interest rates...

But if you have the cash available to repay the student loan now you can probably invest that cash somewhere that will give you a higher return than the interest you would pay on your student loan.

I agree with the OP - a lot of people don't make a rational decision over this when they use the argument of "don't want that debt hanging over my head".

It's like if you were to buy a house and had the option of taking out a mortgage at 5% for 25 years when you expected the house to appreciate in value by 100% over those 25 years. Would you do it or would you turn it down because you didn't want the debt hanging over you.

Why do some students' parents pay their tuition fees?

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