Their A-Levels are in, they got the grades, but for some households, there is one glaring problem. The cost. Can your son or daughter afford to go to university?

Your son or daughter can increase their lifetime earning potential dramatically by going to university.

Figures suggest that, over the course of a lifetime, women can expect to earn about £250,000 more if they have a degree, while men can earn £170,000 more.

But in England, high tuition fees mean that the average student graduates with more than £50,000 in debt.

This figure can seem scary at first, particularly if you are struggling with problem debt yourself and don’t want to put your children through the same hardship.

In reality though, student loans represent a soft type of debt. Your son or daughter will only start repaying them when they earn over £25,000. And most students will never repay the debt.

One more pressing issue, however, is how students will meet the cost of their living expenses while they are actually at university.

There should not be anything stopping your son or daughter pursuing a degree at university, but in this blog post, we weigh up all the costs of going to university to help you make a more reasoned decision.

Tuition fees and repaying student debt

Tuition fees make up most of a student’s debt. Universities are allowed to charge up to £9,250 per year for undergraduate degrees, and there are only a few universities that will charge less than this.

But no student has to pay these fees up front. The best option is to get a loan from the Student Loans Company.

We described this as a soft loan because the repayment terms are favourable. Students will only start repaying the loan once they earn more than £25,000.

After this threshold, they will pay 9% of their income in repayments. So if they earn £26,000 in a year, they will only repay £90 to the loan company (9% of £1,000). Like with income tax, the repayments will come straight out of their wage packet, so there is no chance that they will get behind on repayments.

30 years after your son or daughter graduates, any remaining student debt will be written off. This means that only people at the very top of the income scale will actually end up paying back the full debt plus interest.

Maintenance loans and affording university now

Soft repayment terms on tuition fees make university affordable in the long-run, but for most students and their parents the more pressing issue will be how they can afford to live while they are actually at university.

To help with living costs, Student Finance England can also supply a maintenance loan which will be repaid on the same terms as the tuition fee loan.

If a student is under 25, then the maintenance loan amount will depend on their taxable income plus the income of their parents. This is because, for higher earning parents, it is expected that they will chip in to supplement the maintenance loan.

For the 2018-2019 academic year, if a student is living away from home and outside London they can get a maintenance loan of up to £8,700. The maximum maintenance loan is less if the student will live at home and more if they elect to study in London.

Even if a student receives the top maintenance loan, much of this money can be hoovered up by expensive university accommodation.

The maintenance loan system is not perfect, and if your son or daughter cannot get the top maintenance loan payment, they may have to supplement this loan by getting a part-time job or else living frugally to afford to live at university, but it is still possible.

If you are struggling with problem debt, speak to a member of our personal debt advice team today. Call Umbrella.uk : 0800 611 8888.