\n<\/p>\n
Our child is heading to university soon \u2013 should we try to pay their tuition fees upfront so they are not saddled with a debt for decades?<\/p>\n
Our child is a recent graduate and their student loan debt is ballooning \u2013 should we help pay off some or all of it?<\/p>\n
Up and down the country, these questions are being asked and argued over as families try to navigate their way through the unfolding student loans crisis.<\/p>\n
On average, young people now leave university with just over \u00a350,000 in student loan debt. But some have seen what they owe rise dramatically: data issued this month shows that almost 180,000 now owe more than \u00a3100,000, and one graduate has a \u00a3314,000 debt.<\/p>\n
<\/span>Martin Lewis, the MoneySavingExpert founder, says your child\u2019s tuition fees are not a parent\u2019s priority. Paying off the fees means \u2018money gone that you can\u2019t give towards a mortgage deposit later\u2019.<\/span> Photograph: Kirsty O\u2019Connor\/PA<\/p>\n A survey of 2,000 UK parents aged 45 to 65 commissioned by Octopus Money found that some have tried to take on more of the cost for their child in order to avoid large loan repayments later in life. One in nine (11%) had paid some or all of their children\u2019s tuition fees upfront, with a smaller proportion (5%) helping their offspring make overpayments on their student loan(s) after graduation.<\/p>\n There is of course no one-size-fits-all answer for parents \u2013 every family\u2019s financial situation is different.<\/p>\n Also, some would argue this is \u201ca well-off people\u2019s problem\u201d, as many families don\u2019t have the luxury of being able to turn down the offer of student finance, or savings to pay off a graduate child\u2019s debt.<\/p>\n But for some it is almost decision time: in England and Wales, those planning to go to university this autumn can apply for student finance from Monday (23 March).<\/p>\n Need to know<\/strong> With student finance, there are two types of loan available: the tuition fee loan, which covers the course fees, with the money paid directly to the university, and the maintenance loan, designed to help with living costs.<\/p>\n England, Scotland, Wales and Northern Ireland each have their own systems. (Tuition fees for eligible Scottish students are paid by the Scottish government.)<\/p>\n double quotation markWhen your child starts repaying and how much depends on the repayment plan they are on \u2013 there are five different ones<\/p>\n For example, in England, for the 2026-27 academic year, students can apply for a tuition fee loan of up to \u00a39,790, and a maintenance loan of between \u00a34,013 and \u00a314,135 (depending on where they live and household income).<\/p>\n Both need to be paid back, and interest is charged from the day the first payment is made until the loan has been repaid in full or written off.<\/p>\n When your child starts repaying and how much depends on the repayment plan they are on \u2013 there are five different ones. For students from England heading to uni this year or (probably) in the next few years, it is plan 5, while for students from Wales, it is plan 2.<\/p>\n Remember: what your child will repay each month depends solely on what they earn, not what they owe. Graduates have to repay 9% of everything they earn over a threshold \u2013 for plan 5 this is now \u00a325,000 a year, and for plan 2 it is now \u00a328,470 a year. Plan 5 loans have a 40-year repayment period before they are written off, while for plan 2 loans it is 30 years. But plan 5 interest rates are lower: RPI inflation (the current rate is 3.2%) compared with between 3.2% and 6.2% for plan 2.<\/p>\n Your options<\/strong> Your child doesn\u2019t have to take out these loans (although most do).<\/p>\n In terms of the tuition fees, the student \u2013 or, more likely, their parents \u2013 can pay the university directly. Each will have its own policy on this \u2013 many allow people to spread the cost over monthly or termly instalments, which will help those who can\u2019t manage the whole lot in one go. The Queen Mary University of London website gives an example of a home undergraduate instalment plan where you pay 25% of the total tuition fee amount of \u00a39,535 (the 2025-26 amount) before enrolment, which is \u00a32,383, then seven monthly payments of \u00a31,021.<\/p>\n Similarly, your child doesn\u2019t need to take out a maintenance loan, although for many people this is their main source of cash while at university. However, it typically isn\u2019t enough to cover all their living costs. Without one, there will need to be a plan for how your child\u2019s living costs \u2013 rent, bills, food, etc \u2013 are going to be paid for. Students spend an average of \u00a31,142 a month, which includes \u00a3529 on rent and \u00a3146 on groceries, according to a 2025 survey by the website Save the Student.<\/p>\n <\/span>Heading to university? With student finance, there are two types of loan available: the tuition fee loan and the maintenance loan.<\/span> Photograph: Maskot\/Getty Images<\/p>\n Also, when applying for student finance, your child doesn\u2019t have to borrow the full amount if you want to pay some yourself \u2013 they can take as much or as little as they want, and that applies to the tuition fee and maintenance loans.<\/p>\n Your child will need to apply for student finance for each year of their course. Students can take out finance for whichever years they need, and every year is an individual application, says the Student Loans Company (SLC).<\/p>\n Tom Francis, the head of personal finance at Octopus Money, says that money used to pay fees now \u201cis money you can\u2019t use later, and there are often moments after university when parental support can feel especially valuable, whether that\u2019s helping with a house deposit, rental costs or periods of unpaid work\u201d.<\/p>\n Equally important, he says, is the impact on your own finances. \u201cMany parents asking this question are also thinking about retirement, navigating rising mortgage costs and, in some cases, financially supporting ageing parents. Using savings to pay university fees may limit your ability to boost pensions, build emergency funds or manage later-life costs.\u201d<\/p>\n When asked by a parent whether they should pay their daughter\u2019s tuition fees so she doesn\u2019t need a loan, Martin Lewis, the MoneySavingExpert founder, made a similar point, saying: \u201cIf you pay off her tuition fees now, that\u2019s money gone that you can\u2019t give her towards a mortgage deposit later \u2026 I would argue this isn\u2019t your priority.\u201d<\/p>\n double quotation markTrying to predict future earnings is hard when your child is several years away from entering the world of work<\/p>\n Will Stevens, a partner at the wealth manager Killik & Co, says one of the most important things to consider \u201cis the potential earnings of the child after they graduate because that makes a really big difference as to the affordability of the loan\u201d. Some in high-paying careers could clear their debt reasonably quickly \u2013 but that won\u2019t be the case for most.<\/p>\n Remember that your child will only make repayments when they earn more than the threshold (currently \u00a325,000 a year for plan 5). If they never earn above it, they won\u2019t pay a penny.<\/p>\n Of course, trying to predict future earnings is hard when your child is several years away from entering the world of work. Stevens says one option is to take the loan but put some money aside to potentially repay it depending on how your child gets on at university. You could invest this money and reassess when you have a better idea of their earning potential.<\/p>\n When asked about paying tuition fees upfront, Tom Allingham, a money expert at Save the Student, suggests that if parents have a lump sum available, probably the best thing is to give their child money towards their living costs while they are studying.<\/p>\n Need to know<\/strong> Most undergraduate students from England currently at university have a plan 5 loan, as that is the one for people who started their course from autumn 2023 onwards. For students from Wales, it is plan 2.<\/p>\n Students at university now are charged interest the moment the first payment was made to them and\/or their university. So even if they only started last autumn, they will already have accrued interest.<\/p>\n Your options<\/strong> The good news is that your child can take out finance when they need it.<\/p>\n So if your child started university last autumn and took the finance for the current academic year, they or you are not tied into continuing to do so. If funds allow, you can pay off some or all of their loan at any time.<\/p>\n The SLC website has a section outlining how you can make voluntary payments.<\/p>\n <\/span>Students attend a lecture.<\/span> Photograph: David Kashakhi\/Alamy<\/p>\n Need to know<\/strong> The current row has focused on the estimated 5.8 million students from England and Wales who took out a plan 2 loan between September 2012 and July 2023.<\/p>\n Many of these graduates are having loan repayments deducted from their pay packet every month, but this figure may be dwarfed by the interest that is added to their debt each month. As a result, the sum they owe is getting bigger, not smaller.<\/p>\n The catalyst for this row was the chancellor\u2019s decision to freeze the salary threshold for plan 2 student loan repayments for three years. This threshold, above which graduates have to repay 9% of anything they earn, is now \u00a328,470 a year, and will rise to \u00a329,385 next month, but will then stay frozen at that level until 2030.<\/p>\n Any remaining plan 2 loan debt is written off after 30 years.<\/p>\n Your options<\/strong> A lot of the above information and advice applies here, too. But this is the toughest category because in many cases the debt will be very big by now \u2013 perhaps \u00a370,000 or \u00a380,000 or even \u00a3100,000-plus.<\/p>\n You can voluntarily make extra payments or pay off the whole of your child\u2019s student loan at any point. But bear in mind that they have to make repayments until the loan is fully repaid \u2013 which may leave some questioning whether it is worth paying just a bit off.<\/p>\n If you do nothing else, ask your child to provide you with up-to-date information from their student loan account about how big the debt is now, how fast it is growing, how much interest is being added each month and (if applicable) how much they are repaying each month. Then at least you know what you are dealing with.<\/p>\n There are a range of opinions on this topic. Killik & Co\u2019s Stevens says that in his view: \u201cIf parents have the ability to overpay or repay portions of a plan 2 loan, it likely makes sense because the interest rate is so high.\u201d<\/p>\n <\/span>An estimated 5.8 million students from England and Wales took out a plan 2 loan between September 2012 and July 2023.<\/span> Photograph: Andrew Fox\/Getty Images<\/p>\n Save the Student\u2019s Allingham says one of the main complaints graduates have is that they are trying to pay down their student loan debt but the balance isn\u2019t decreasing, so they feel as though it is more difficult to save for a house deposit or starting a family.<\/p>\n Let\u2019s take the example of a parent who is willing and able to pay off their child\u2019s entire student loan debt of, say, \u00a350,000. Allingham says: \u201cIf the reason your child is frustrated about their student debt is because it makes it difficult to save for a deposit, I\u2019d argue the best thing you can do is cut out the middleman and just give them that \u00a350,000 towards a deposit instead.\u201d<\/p>\n Along with other experts, he also says that with the growing political pressure, the way plan 2 loans work may change. We can\u2019t be sure what, if anything, will happen but \u201cthe tide is moving in the direction of changes \u2026 To wipe the debt now might not be sensible given that in six months or a year\u2019s time, the terms might be changed so that it\u2019s not such a burden on graduates.\u201d<\/p>\n The consumer champion Lewis says people should not voluntarily overpay before trying to work out if this will actually help. For most plan 2 holders, he says, it is likely that smaller overpayments \u2013 of, say, a few thousand pounds \u2013 may still leave the graduate repaying 9% of their earnings for the full 30 years, \u201cin which case the overpayments won\u2019t have any impact, and you will have just flushed that money away without any gain\u201d.<\/p>\n Some experts have argued that pretty much the only plan 2 people who should be overpaying are very high earners and those with very strong salary prospects.<\/p>\n The amount of variables make it impossible to provide a categorical answer as to whether overpaying makes sense for an individual, Lewis suggests. However, he has produced a template prompt that people can cut and paste into an AI chatbot such as ChatGPT or Gemini and then fill in their details. This may help give people \u201ca rough idea\u201d.<\/p>\n A stopgap option being explored by some parents who can afford it is to voluntarily repay just enough to ensure that their child\u2019s plan 2 loan debt at least doesn\u2019t get any larger.<\/p>\n One parent of a plan 2 graduate who is hoping to do this told us: \u201cI\u2019m not sure Martin Lewis would say it makes financial sense, but at least it [stopping the debt from getting any bigger] gives you options to clear it all [later].\u201d The parent said they couldn\u2019t just watch the debt get bigger and bigger: \u201cIt\u2019s too depressing. So it\u2019s a way of feeling more in control.\u201d<\/p>\n Ceri and her husband raided their savings to pay off the student loans of their two graduate children, at a total cost of about \u00a380,000.<\/p>\n She told Guardian Money they did it so their daughter and son \u201ccan afford their rent and start to save for a house deposit\u201d.<\/p>\n Asked if paying off the debt meant she felt relieved, Ceri, who lives in Wales, says: \u201cI\u2019m still fuming about it \u2026 I feel stressed about other children in the family, children of my friends who can\u2019t afford this. My daughter\u2019s partner\u2019s loan is nearly \u00a3100,000.\u201d<\/p>\n <\/span>After graduation celebrations comes the taks of analysisng of finances.<\/span> Photograph: Mark Chilton\/Getty Images\/iStockphoto<\/p>\n She adds: \u201cI was horrified at the interest rates that were being charged \u2026 Interest is charged from the second they are given their loans.<\/p>\n \u201cMy husband and I were lucky enough to have the money in savings. So we paid the degree balance in full for both of them.\u201d<\/p>\n Their daughter\u2019s debt was about \u00a335,000, while their son\u2019s was about \u00a345,000.<\/p>\n \u201cIt\u2019s a huge amount of money \u2013 we\u2019re lucky to be able to do it.\u201d<\/p>\n Their debts were significantly lower than those of English students because Welsh students were paying lower tuition fees at the time, she explains.<\/p>\n Both children also did a master\u2019s, but the couple told them they had to repay those loans themselves.<\/p>\n \u201cI hadn\u2019t appreciated that their degree loan and master\u2019s loan are deducted at the same time from their pay. My son, who luckily went on to get a good job, was probably having about \u00a3300 a month deducted for his degree, and \u00a3130 for his master\u2019s.\u201d<\/p>\n Charlotte*, 50, from London, says working out how to support her 18-year-old son through university without saddling him with long-term debt has been \u201cbewildering\u201d.<\/p>\n She says: \u201cWe\u2019ve got a lot of graduates at work who talk about how much comes straight out of their salary every month. And we\u2019re in London \u2013 they\u2019re also paying London rent. It\u2019s a struggle for them.<\/p>\n \u201cSo our view was that if we could afford to take some of that struggle away at source for our son, we would. But there\u2019s so much conflicting advice.\u201d<\/p>\n Charlotte \u2013 whose son started university last autumn \u2013 says that in the end they decided that while he would take out the \u00a39,000 annual tuition fee loan, she would cover his living costs so he did not need a maintenance loan.<\/p>\n \u201cHis accommodation this year is about \u00a36,000, and we\u2019ve given him about \u00a33,000 to live on. The expectation is that he\u2019ll work during the holidays to top up his social spending,\u201d she says.<\/p>\n Altogether, Charlotte estimates she is spending at least \u00a310,000 a year supporting her son, including occasional emergency help. If she continues to cover accommodation next year, she expects the cost could rise to about \u00a314,000 annually.<\/p>\n <\/span>Charlotte has been covering her son\u2019s accommodation costs.<\/span> Photograph: Johnny Greig\/Alamy<\/p>\n \u201cIt\u2019s things like the \u2018I\u2019ve run out of money\u2019 texts or needing a bit extra to buy his girlfriend a present,\u201d she says. \u201cIt all adds up.\u201d<\/p>\n Charlotte says parents face a difficult balancing act between helping their children and encouraging independence. \u201cYou want them to take responsibility for supporting themselves because they\u2019re adults now. But at the same time I worry they\u2019re going to have a much tougher time than previous generations. Rent is higher, unemployment is rising, and then on top of that, there\u2019s potentially a lot of debt.\u201d<\/p>\n Charlotte has two more children, aged 16 and 20. \u201cI still don\u2019t know whether we\u2019ve done the right thing,\u201d she adds. \u201cAnd with my daughter, who\u2019s 16 and likely to go to university, we\u2019ll probably be going through the same decisions all over again.\u201d<\/p>\n * Name has been changed<\/p>\n How much does my graduate child need to earn to reach the point where their plan 2 student debt is getting smaller, not bigger?<\/p>\n There\u2019s a useful (if depressing) interactive tool on the Institute for Fiscal Studies website that shows you how much your child would have to earn for their plan 2 debt to get smaller in cash terms year on year because they are repaying more than the interest that is being added.<\/p>\n For example, if their outstanding loan balance is \u00a350,000, they would need to earn more than about \u00a363,000. If their outstanding balance is \u00a380,000, they would need to earn more than \u00a384,000.<\/p>\n It suggests that even if a parent got their child\u2019s loan balance down to, say, about \u00a322,000, they would still need to earn more than \u00a340,000 for the debt to decrease (because they are repaying more out of their salary than the interest that is being added).<\/p>\n","protected":false},"excerpt":{"rendered":" Our child is heading to university soon \u2013 should we try to pay their tuition fees upfront so they are not saddled with a debt for decades? Our child is a recent graduate and their student loan debt is ballooning \u2013 should we help pay off some or all of it? Up and down the<\/p>\n","protected":false},"author":1,"featured_media":47248,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[3189,2450,14728,7117,13477,1040,393,781],"class_list":{"0":"post-47247","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-education","8":"tag-bank","9":"tag-dad","10":"tag-debts","11":"tag-finance","12":"tag-mum","13":"tag-pay","14":"tag-student","15":"tag-university"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/47247","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47247"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/47247\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/47248"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Those with a child heading to university soon<\/h2>\n
Those with a child at university now<\/h2>\n
Those with a graduate child or children<\/h2>\n
\u2018I was horrified at the interest rates charged\u2019<\/h2>\n
\u2018I\u2019m spending \u00a310k a year supporting my son\u2019<\/h2>\n
Weighing up the loan balance<\/h2>\n