Children's University Fee

V

virgo

Hiya

So i had lunch with an old friend whose son has just graduated with a combined Law /Media degree...she told me his HECS debt is 55K:eek: which he will have to pay back eventually when his salary reaches a certain level....


My parents paid in full for my (and my siblings') university fees (plus board and allowance)...so we were off to a good start....

I am thinking of telling my kids they will each have a 100K budget....if they spend more, they will have to top it up themselves ...if they spend less, they will keep the difference....

I wonder what will be the fallout?

Care to comment on my strategy?
 
We initially thought about paying the HECS (now HELP?) for our sons. First son told us after two years during an argument about how much better off all his friend were and I threw in "how many of them will come out of uni with no debt?" that he told me "it's no help to me financially now though, is it?" so we thought we would stop at two years.

Second son, we did the same for, and third son has deferred his first year, so may not even go to uni, but if he does, we will do the same for him. I'm thinking if he doesn't go to uni, but gets a job, we would look at gifting him the equivalent of two years' uni fees to go towards his house deposit. We will see what happens with this as his life and attitudes unfold.

I also think I would want to say "if you don't work and subsequently fail, we will not pay the next year". I think there are plenty of people who spend more time "studying" as a means of putting off actually getting a job, especially if they are comfortable at home, with food put in front of them, washing done, and no board paid... wait a minute, that describes my sons whilst at uni :D.

No way would I give them an allowance of $50K even.
 
Sorry yep another "tough love Mum" here.

We didn't pay for either of our kids uni fees
( Daughter studied in NZ so I had to fly to NZ and set up her "citizen by decent" so she didn't pay international student fees but that was the extent of it)

IF we had a good year we sometimes gifted the kids a small amount ( $500 - $1000) I think that happened 3 -or 4 times so maybe a total of $5 -6000 over the course of 6 years at uni

Son did Engineering at Wollongong Uni and Daughter did Business/Tourism at AUT both HAD large hecs type debts.. Both kids (28 and 29) have paid those loans out, although daughter is now doing her Masters at Melb Uni.

They have both said that working for their education meant they didn't slack off as much as some of their mates who knew Mum and Dad would take up the slack if they failed a subject or two.

IF you are serious about providing a cash amount, I would probably not tell them anything about it and just pay out the debt when they graduate. OR buy them a house when they graduate $100K is a nice deposit :)
 
Most modern HECS/HELP debts are around half that - approx $25k.

I think the HECS/HELP scheme is fantastic to allow everyone access to University and the loan agreements are very gentle and most people pay it off when they have their job and it's little hardship. The payments are automatically deducted by payroll so it's not like they have to 'find' the money. It's like just having a lower paid job as they don't have access to that money from the beginning.

If we contribute anything to our kids it will be like most employee study schemes where you get the money for each unit IF you pass.

If you were to give such a sum of money to the kids it would be better for a house deposit and let them pay off the HECS debt in the traditional way via their wages.
 
Similar to what Westminister said, I'd rather provide funds for getting first home since HECS will get sorted out once working.

Good thing I won't have these expensive things called children.
 
I have a quiet giggle when parents think they have to pay for their kid's uni education.

They don't have to go to uni.

It's your kid's choice to go, incur the debt and then it's their choice to pay it back.

Same if they bought a car, bought a house or go on a 12 months OS gap year.

Would people be happy to pay for all of those???

I am a parent of a uni student and have told them the very same. He is an adult and now makes adult decisions with adult consequences. Will have a daughter at uni in 2015 and she has been told as well.

The sooner you can do that the better.
 
I have no plans to offer to pay uni fees, giving kids too much of a safety net just makes them slack.

I would consider paying out their HECS/HELP debt as a graduation present, but I sure as hell wouldn't tell them that until they graduated.
 
I am going to go against the grain here, we are paying for our children, one is studying in New York and the other Uni in Perth. They both understand that its not a free ride, they will need to put in the hard yards if they expect this arrangement to continue.
I feel if you can afford to help your children today why not, while they are young and starting out.

MTR:)
 
I don't see the point in paying uni fees either. Few reasons,
- it is the cheapest loan you can get
- children won't realise the value now or may be never
- they only pay back once they have a decent paying job anyway
 
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WOW what you are considering is very generous.

My educational journey is at the other end of the spectrum - I can't comprehend what it would have been like to be supported.

As a parent you have the choice to help or hinder(unintentionally) your children. You need to ask yourself which one you will be doing in this case both short and longer term regardless of how deep your pockets may be.
 
Just remember that with all the changes proposed at present, HECS might not be around much longer and it likely won't be as "low" as it is now.

FWIW, my debt is around 50k as well. That's for an undergraduate degree (normal HECS fees), a graduate certificate and half a masters (both HECS HELP - higher fees). I had to leave the masters as I got a good job offer interstate but I would like to finish here if I have the chance.
 
devank said:
I don't see the point I paying uni fees either. Few reasons,
- it is the cheapest loan you can get
- children won't realise the value now or may be never
- they only pay back once they have a decent paying job anyway
Click to expand...

Devank, I think this is a very good point. Grateful that we have this system in place in Australia.

Isn't the real issue here affordability and basically majority can not afford to pay for their children to go to Uni without sacrificing lifestyle today???
 
MTR said:
I am going to go against the grain here, we are paying for our children, one is studying in New York and the other Uni in Perth. They both understand that its not a free ride, they will need to put in the hard yards if they expect this arrangement to continue.
I feel if you can afford to help your children today why not, while they are young and starting out.

MTR:)
Click to expand...

Good to hear a different opinion to mine. Just out of interest, did you think that studying in New York would provide for a better educational outcome, or would simply be a better experience for your child?
 
HECS is the best debt I have ever had!

Last years interest was around 3% and the repayments are coordinated without me needing to do anything! If I was to loose my job I wouldn't have to keep paying the debt until I found another job.
 
VYBerlinaV8 said:
I have no plans to offer to pay uni fees, giving kids too much of a safety net just makes them slack.

I would consider paying out their HECS/HELP debt as a graduation present, but I sure as hell wouldn't tell them that until they graduated.
Click to expand...

Yeah I agree with this, if you are going to do it then give them a surprise at the end. If you pay for them all the way through they are just going to think life is one great big free ride!

My philosophy is to give them every chance in life until they are 18 and then let them live the next 10 years on their own two feet. I think 20's are the time you learn about how the world really works and I think it's best to do that without Mum & Dad bailing you out all the time.

There might be exceptions to this, like shouting an overseas family holiday (if they want to hang around us), or paying for half their car, but nothing major and not often.
 
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