A university tuition savings calculator can be a valuable tool for providing financial security for students.
In the UK, student loans are available to all to cover university tuition fees. Graduates start to make payments in the April following their final year of study. Repayments are not required unless a graduate is earning more than £26,575 per year.
Currently, payments work like a tax, deducted at 9% of earnings above the threshold. Interest is charged at 3%. Student loans are written off after 30 years.
Students living in Scotland or the EU, and studying an undergraduate degree in Scotland, should get their tuition fees covered by the Students Award Agency for Scotland.
Why use a university tuition savings calculator?
Where available, student loans are a good way to pay tuition fees. However, there are some instances when a student loan might not be appropriate, or possible:
- Students may choose to study abroad, or may not fulfil residency criteria.
- A student may drop out of a course, then apply for a different one, or choose additional study.
- According to Sharia law, Muslim students may not take advantage of loans with interest.
- Not all higher education is eligible for student finance. Some performing arts courses are not degrees.
- There is no guarantee that the government will retain current student finance terms and policies.
How to use a university tuition savings calculator
It can be difficult to find a university tuition savings calculator online that doesn’t refer to colleges in the US. Even so, it is possible to use a calculator in dollars for any currency; the numbers are the same. However, some will only calculate based on US college types and course duration. College and university-specific savings calculators are helpful because they can estimate amounts for more than one child, which is a difficult sum to do on paper.
To see some basic numbers for how much you should squirrel away for the university years, a standard savings calculator might be sufficient.This type of calculator shows how long it will take to save towards your goal, indicating how soon you should start saving, and what to put aside each month. It is helpful to input different numbers to work out the best individual plan.
More complicated education savings calculators give parents an accurate picture of the financial commitment required to give their children the best educational start in life. This calculator from Prudential has the option to include school fees as well. Also provided is a calculator which can estimate how much parents should invest now to cover all future tuition costs. These calculators demonstrate the benefits of saving for university before a child has even started school.
Calculating maintenance costs
There will be three or more years of living expenses to pay for. Families in the UK on a low income are eligible for maintenance loans. These cover accommodation, travel, books, equipment, bills and other living costs. However, everyday spending can mount up into further debt. Maintenance loans are means tested and are not available in full to all students. Some parental contribution is expected.
With a university maintenance savings calculator, parents can plan to have enough funds ready for expected and unexpected maintenance costs. This broadens educational horizons, ensuring that colleges further from home are not out of reach financially.
Saving for university maintenance costs puts less pressure on students to work. It can be difficult to hold down a job when studying a time-intensive subject, such as pharmacy.
Making the most of university tuition savings
Encouraging a gap year will give you and your child an extra year to build up savings. A university tuition savings calculator assumes that all money for tuition must be ready at the beginning of the first year of study. This need not be the case, as savings can continue after the course has begun. When paying off a student loan, it’s wise to wait until any loan repayments become due. Theoretically, there will be another few years to save.
After attending the graduation ceremony, parents can judge whether the years of study are likely to result in a high-paying career. Graduates may prefer help towards buying a property, a loan to set up in business, or assistance in paying off higher interest borrowing.
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