Are maintenance loans compulsory?

In cases where the parents are in a position to 'keep at home for free' or 'loan' the student (their child) the money for maintenance costs themselves, are they able to do so? What might be the advantages/disadvantages of so doing?

Hi, the loan would be at a beneficial rate of interest comparable to current savings rates - say 3.5% - which would still be half that of the student loan rate of the 6.9% capped RPI. That way it is a win-win for parents and student. That said, by helping out with jobs around the house I am sure some non-financial 'payback' could be factored in.

Hi, the loan would be at a beneficial rate of interest comparable to current savings rates - say 3.5% - which would still be half that of the student loan rate of the 6.9% capped RPI. That way it is a win-win for parents and student. That said, by helping out with jobs around the house I am sure some non-financial 'payback' could be factored in.

Surely using savings which would generate 3.5% pre-tax would be better than using debt at 6.9%....?

It all depends on your future earnings potential . If you never earn over the 25 or 27 K threshold ( depending on when you started your degree) the interest rate never comes into it as you don’t pay anything back! And given that you only pay back 9% of what you earn over and above this threshold for the 30 / 40 years afterwards, most graduates will never earn enough to pay off the capital, let alone the interest. It depends on your degree and your chosen career path and earnings afterwards whether parental financing costs more or less than SFE.