The A-Level results are out again, and it looks like over 411,000 new students will be starting their first year at university this autumn.
But with universities charging up to £9,250 in tuition fees a year (and £11,100 for accelerated degrees in England), plus accommodation and living costs on top of that, each student will graduate with a huge student loan.
In 2017, according to the Institute of Fiscal Studies, the average student in England will have debts of more than £50,000 when they graduate.
Does it make sense to pay off a grandchild's student loan?
As a loving parent or grandparent, you naturally want to help them out a bit, to try to lessen the financial burden they’ll inevitably end up with.
Here’s our guide to navigating some of the issues around helping out a student financially.
Discuss with each other
If you’re the grandparent, make sure you call the parents to discuss before you make any hard and fast decisions.
Know how much you’re willing to contribute, but don’t insist – whilst your help will very likely be appreciated, the parents may wish for their offspring to learn to budget.
They may also want the money to be a safety net, rather than a lump sum presented as a gift that could be frittered away on alcohol and takeaways (something very easily done if you’re unaccustomed to having sudden large sums of money in the bank).
Dilemma: My daughters keep asking for money
At the same time, don’t allow yourself to be talked into giving more than you can afford – that will only breed resentment.
If you’re the parent, don’t feel ashamed or embarrassed about accepting money from generous grandparents – they only want your child to have the best start in life, just like you do.
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Meet in the middle
University may be the first time a teenager has to make ends meet on their own, and sometimes they can get it wrong.
As mentioned in the previous point, when someone has never had to budget before, a couple of thousand pounds in the bank feels like it will last forever.
A few nights out drinking, a few splurges in the shops, a few takeaways instead of cooking, will quickly show how easily money can be spent – but by then the funds are gone until the next instalment, and it's cereal or beans on toast until then.
Offering to match anything they earn over summer is a good way of instilling the value of money into them early; having to work for a paycheck will make anyone a bit more reluctant to part with their money than if they simply receive a handout. And the promise of more cash might spur them on to work harder than ever before, putting them in a good state of mind for when term time rolls around!
What every teenager should know about money
If you’re not as well off as you’d like to be, you might struggle to help out financially, but there are other ways you can make life easier for the new student.
Food parcels filled with pasta, rice and canned foods will ensure they’ll not go hungry, and you know exactly where your money is going.
Plus, if you send herbs and spices, you might entice a culinary novice to try to cook for themselves, saving money and gaining valuable life skills along the way.
10 ways to eat well on a budget
Or perhaps you might offer to give them a crash course in cookery before they leave, as a way to help them and get in some valuable quality time together – something they might treasure long after any monetary gift has disappeared.
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Gifts with no strings attached
Whilst you want your children or grandchildren to knuckle down and work hard, odds are they will spend a large chunk of their time socialising and generally conforming to the cliché of lazy student – but some might argue this is just as important a part of university life as going to lectures and writing essays is.
They’re learning how to behave as adults, and part of that is working out how to budget, discovering the consequences of their actions, and learning from their mistakes.
If you don’t approve of their lifestyle and find a way in each conversation to remind them that they’re living on your money, it won’t earn you any goodwill, probably won’t change their behaviour and could cause resentment.
The complete guide to giving gifts to grandchildren
Just trust that they’ll figure it out for themselves, and when they get older, they’ll appreciate your kind gift so much more if it didn’t come with strings attached.