Financing diploma vs degree

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Hilltop
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Financing diploma vs degree

Post by Hilltop » Wed Oct 09, 2019 8:57 pm

Hi, I’m encouraging my DD to think about doing the vocational 6th form/degree route rather than diploma when she’s older, mainly for financial reasons, as my understanding is the diplomas are more expensive and you don’t get a loan, whereas you get a student loan with the degree and it’s cheaper. But I just wanted to make sure this was correct or whether I’m making a sweeping statement here!

Many thanks in advance

islandofsodor
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Re: Financing diploma vs degree

Post by islandofsodor » Wed Oct 09, 2019 9:41 pm

It depends on your individual circumstances.

Degree course tuition fees are paid for via Student Loan which has to be paid back once the student is earning over a certain amount. The maximum is £9250 per year

Diploma tuition fees are around £12-14k per year but if you get a DaDa your contribution depends on family income. On our income I pay less than £3k per year. If you earn over £90k you have to pay the full lot. The DaDa doesn’t have to be paid back.

Maintenance loans are available for degrees but how much you get and how much parents are expected to contribute depends on family income again. I currently pay about £6,000 per year for my daughter’s rent, food and living expenses. On a degree I’d be expected to contribute about £4,800 per year so I’m down on that.

A family on a very low income may be better off on a DaDa if you factor in no student debt but a family on a high income better off with a degree.
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Hilltop
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Re: Financing diploma vs degree

Post by Hilltop » Thu Oct 10, 2019 9:19 am

Many thanks! That’s really useful and clear.

lawn
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Re: Financing diploma vs degree

Post by lawn » Fri Oct 11, 2019 8:28 pm

Hi

We are far more likely to tell our daughter she can only go down the degree route.

We are at the higher end of the Dada income scales. Part of this is caused by husband having a company car plus having petrol provided. These benefits in kind add £10k+ on to his income. Though his salary looks good as gross, the car and fuel reduce the amount of salary he can earn before paying tax (ie they reduce his tax free allowance).

In addition we have an older child at Uni, He gets the minimum maintainance loan, which would not be enough to pay his rent, so we pay that for him.

We would struggle to fund a Dada contribution, plus living expenses and rent as well as at least 1 overlapping year of both children needing help, assumming daughter is offerred something at age 18.

In addition take into account not everyone is on a Dada, if not offerred one then you are looking at funding all the diploma course costs as well as living and rent costs.

I personally don't have an issue with daughter having student debt. I can see it can be quite daunting to think of them graduating of with £40-50K+, but as stated they only pay back when they start earning over £25K and then they pay 9% of anything above that. If they earn below during the timespan they are due to repay they don't pay anything. After 30 years anything outstanding is written off. At that point it makes no difference whether you're having £3K written off or £30K for example.

If daughter wanted to be a Nurse or a teacher, there'd be no option other than her doing a degree. I wouldn't if that was the case pay her tuition fees for her due to the reasons above. I'd definately be giving the Goverment the £27+K whereas as it's possibly that daughter would never have to pay that amount back through earnings.

You also need to be aware that some drama schools charge more in tuition than you can borrow as a student loan. Arts Ed and Mountview are examples of these (there are others), daughter has been told she can't look at these either.

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Re: Financing diploma vs degree

Post by pjw » Wed Oct 16, 2019 3:16 pm

Also if you're looking at degree courses you should check with the college/uni how much student loan you will be able to get to contribute to the degree fees. Some are classed as 'private' providers and I believe the max you can get for student loan is about £6k.

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