# Extending Mortgage term to fund children's education.



## Allpartied (2 May 2019)

A quick query on extending the term of a solvent mortgage. Fully paid, on time, without any arrears. 

I have 65000 Euros left on a 160k,20 year mortgage, with just over 6 years to go. It's a joint mortgage with my wife. Our current net salary per month is around 5000 Euros, which can fluctuate a little, up or down. 
Current payment is 940 per month, fixed 3.5% until Jan 2020. ( Ulster Bank)  

We have four children, all aged close together, who are about to start college.  Let's assume they all want to go to third level. Expenses in Ireland for each child is approx, 8000 Euros per annum.

For several years we will have three in college at the same time, so expenses will be very high. 
I would like to extend the mortgage to the maximum possible, ( i am 53, wife is 50) and reduce the mortgage payment during the college years to increase the cash flow. 
We have some savings ( about 30k), but this will drain fairly quickly, so reducing the monthly mortgage by 500 euros would help to get us through this period.  

Has anyone had any experience of extending the mortgage term, without arrears, to deal with expected cash flow issues? What is the maximum age a mortgage can be extended to for two public sector workers?


----------



## RedOnion (2 May 2019)

Allpartied said:


> What is the maximum age a mortgage can be extended to for two public sector workers?


For UB:
"Maximum age for repayment is 70. Where a mortgage extends beyond normal retirement age, a customer should be able to demonstrate continued ability to service the loan by way of pension or alternative means."


----------



## NoRegretsCoyote (2 May 2019)

If extending formally doesn't work, you can at least shop around and get a better rate from another provider. At this point most of your mortgage is amortisation but you might save up to €20 a month on the interest.

Also - if you are public sector workers, won't you get a tax-free lump sum on retirement? You could just opt to go interest-only on the mortgage for a year or two before the lump sum arrives and repay the balance once you retire.


----------



## Allpartied (3 May 2019)

Thanks for the replies.  
I would like to take the interest only option, but I am doubtful that a bank would agree to such an arrangement. From what I have read mortgage providers get a bit nervy when no capital is being paid down on the mortgage and usually only provide it to those in serious arrears or financial difficulties.  Although I anticipate I will struggle to meet the mortgage payments when the bills start rolling in for college registration, accomodation, books, laptops, upkeep, etc, at the moment I don't have any such difficulty. 

 According to the pension calculator page i would be entitled to a lump sum of 72k at age 60 and my wife would get 25k.  So there would be enough to discharge the mortgage on my 60th birthday, which coincidentally is the actual date that the mortgage term ends.  This would enable us to put aside the non-interest part of the mortgage and have it as an accessible fund should we need it during the upcoming college years. 

I will make a proposal to Ulster Bank and see what they say.  If they turn it down then I will look to extend with another provider.  A 17 year mortgage, for the remaining amount, with KBC, would see my payment down by 500 euro a month.  I could still discharge the mortgage on my original timeline,  when the retirement lump sum comes due. 

I guess I'm in a slightly unusual situation, being entirely solvent, having a clear capital sum which can discharge the mortgage, on time, but facing several years where I might struggle to meet the current payments. 

I'll let you know how I get on. 

Cheers.


----------



## Coldwarrior (3 May 2019)

Allpartied said:


> A 17 year mortgage, for the remaining amount, with KBC, would see my payment down by 500 euro a month. I could still discharge the mortgage on my original timeline, when the retirement lump sum comes due.



I'd go this route, switch and extend the term to the maximum allowable, you'll get a better interest rate and and will at least be still paying off some of the capital each month, and then as you've said you'll have the option to pay off the remainder with the lump sum on retirement.


----------



## NoRegretsCoyote (3 May 2019)

Whatever you do, try and borrow cheaply against your house, rather than expensive unsecured borrowing by you or the kids.

Good luck with it too. The system is not kind to middle-income PAYE workers who live far away from 3rd level.


----------



## cremeegg (6 May 2019)

Allpartied said:


> Let's assume they all want to go to third level. Expenses in Ireland for each child is approx, 8000 Euros per annum.



Is that assuming they live at home.


----------



## Brendan Burgess (6 May 2019)

This illustrates how dysfunctional our banking systems are. 

With a good income and plenty of equity, you should be able to switch to interest only when you need to.  Even further, you should be able to draw down further money to fund the shortfall. 

Instead, we have an idea that a mortgage must be paid down in full over the originally agreed period, whether that suits the borrower or not.

KBC will give you €3k to switch so that would be the best deal on a small mortgage. (2% of €65k is only €1,300) 

You might consider asking them for more than €65k to cover the costs of the next two or three years.  If you borrow an additional €60k @3%, it would cost you only €1,800 or so a year in interest. 

Brendan


----------



## NoRegretsCoyote (6 May 2019)

Brendan Burgess said:


> With a good income and plenty of equity, you should be able to switch to interest only when you need to.  Even further, you should be able to draw down further money to fund the shortfall.



I can see why banks are reluctant.

Nothing to do with this specific case, but can go wrong when you are in your fifties even with good cashflow and positive equity. You don't have much time to make good your misfortune before retirement either.

The courts see the banks as a tool of social policy, and are very reluctant to move on people in retirement, especially as it will fall to the state to house them.


----------



## Allpartied (7 May 2019)

cremeegg said:


> Is that assuming they live at home.



Your right, of course, I am being supremely optimistic. 
Working on the basis that accommodation can be secured, outside of Dublin, for 4000 per annum and the 3000 Euro registration fee ( some tax relief when we are paying more than one fee) and 1000 Euros for   books etc.  Food is going to be pre packed at beginning of week from the family shop and socialising is going to have to come from their own pocket ( to be fair they are all showing a good work ethic, babysitting, waitressing, kitchen  and bar work ).  
But, even so, probably going to be more than 8000 per annum. 

A good student loan scheme, repayable when the graduate hits a certain income level, would be a god send, but there  are too many people who benefit from the current system to change it any time soon.


----------



## misemoi (7 May 2019)

College costs was a massive factor in us deciding to stay in the capital. Not just for education but to give our children the opportunity to live at home in early grad years so they don't have the rent expense we had. Unless they want to fund it themselves! We both left home at 18 and rented until we bought at 34. Scary!


----------



## Ger1966 (7 May 2019)

Hi Allpartied.

I had something similar to you re trying to finance education fees for my kids. In the end, I ended up going with my local Credit Union. 

https://www.askaboutmoney.com/threa...college-fees-after-remortgage-refused.205126/.

Have you considered them?


----------



## NoRegretsCoyote (8 May 2019)

Ger1966 said:


> Hi Allpartied.
> 
> I had something similar to you re trying to finance education fees for my kids. In the end, I ended up going with my local Credit Union.
> 
> ...



Credit union funding at close to 8% or whatever is *much* more expensive than borrowing on the strength of your home.


----------



## Allpartied (8 May 2019)

NoRegretsCoyote said:


> Credit union funding at close to 8% or whatever is *much* more expensive than borrowing on the strength of your home.



Yes, i think it would make sense to remortgage should I need extra cash.  However, I am really hoping to get through this period with as little borrowing as possible.  
I have a small AVC with Irish Life, but I stopped contributions some time ago as I wanted to save as much cash as possible into an accessible savings account.  They did mention that I should fully utilise my tax free lump sum by contributing to AVC's.   This is my current situation regarding the lump sum. 

Gross Basic Salary 71256e, 28 years service by 2025 = Tax Free Lump Sum of 735963 form PS Pension. ( Pre 2004 scheme)

However, entitlement would be 107289  (71256 x 1.5) .  So shortfall is 33693e, which it would make sense avail of, if possible. In addition I have been advised that there is scope to increase the tax free lump sum by increasing income during the last 10 years of working life.  My understanding is that you can use the highest 3 years from the final 10 and average that amount to produce a figure upon which the tax free lump sum is based.  I might be wrong on this so please correct me if that is the case. 

Anyway, got me thinking and I was going to remortgage with KBC ( 3000 Euros to cover legal fees ) and extend mortgage to the max possible. 

Calculations as follows, 

16 year Mortgage KBC = Monthly repayment of 416 Euros 

Current Mortgage Ulster Bank = 940 Euros

Differential is 524 Euros. 

 If I contribute this 524 Euros to an AVC, I can avail of 40% tax relief.  Hence,

Yearly contribution 524 x 12 =  6288 
For 6 years ( Potential date of retirement)  =  37728

Tax relief on 37728 at 40% = 15091 

Because I have extended the mortgage I will pay additional interest on the longer term loan, even if I pay off the loan in 6 years. 

Differential between current interest bill for 6 years, as opposed to the longer term loan is 3372. ( I used an online amortisation calculator) 

As I will get a 3000 euro cheque from KBC I will ,probably,  have 2000 euro left after legal fees.  So take that amount from the increased cost of loan and you get an overall cost of 1372 euros. 

However, with the tax relief of 15091 I will be quids in.  Approx 13719 ( 15091 - 1372).  

By contributing to AVC I will have much more control over the cashflow, as I can stop the payments immediately if I need to access the money for education costs. 

It seems to me this would be a good idea even if I didn't have these bills coming up.  Have I got it right, or is someone able to spot a flaw in may cunning plan.


----------



## Laughahalla (17 May 2019)

Sorry to hijack this but anybody with children in Primary school, please take note and start investing something each month towards your childrens education. It's much better to be able to bank roll education from investment/savings or with current income. Remortgage over a longer term should be an absolute last resort. It's playing with numbers and introduces financial risk and potential for losing your home . Keep it simple and in this case, if possible encourage your children to go to the nearest college/university where they can live at home to keep expenses down or defer for a year so they can get a job and save up to pay for their own education.


----------



## Allpartied (20 May 2019)

Laughahalla said:


> Sorry to hijack this but anybody with children in Primary school, please take note and start investing something each month towards your childrens education. It's much better to be able to bank roll education from investment/savings or with current income. Remortgage over a longer term should be an absolute last resort. It's playing with numbers and introduces financial risk and potential for losing your home . Keep it simple and in this case, if possible encourage your children to go to the nearest college/university where they can live at home to keep expenses down or defer for a year so they can get a job and save up to pay for their own education.



Obviously a good idea.  Also make sure you don't mortgage in the middle of the biggest boom in the state's history, which subsequently leads to a massive bust, coupled with 30-40% reduction in wages.
My situation might be unusual but I am at absolutely no risk of losing my house, even if I extend the mortgage.  I have the capital to fully complete the mortgage on time, I just don't have the cash flow to manage current mortgage payments and college fees over the next few years. 
I'm just thinking out loud of ways to manage these years.  
As you say, college location is also important, as accomodation in Limerick is half the price of Dublin. If they end up doing a generic qualification ( teaching, nursing, for example),  then the prestige of the training college is not relevant and I will be encouratging them to go to the cheapest town.  It's not really an option to travel from our home location.


----------



## Bronte (20 May 2019)

If the bank would rather sell you a loan at a higher interest rate they may not go for the extended term on your loan.  So maybe come up with a 'good' reason for extension other than college costs.


----------



## Allpartied (20 May 2019)

Bronte said:


> If the bank would rather sell you a loan at a higher interest rate they may not go for the extended term on your loan.  So maybe come up with a 'good' reason for extension other than college costs.



That's possible, but I can always switch to another lender and extend the term. 

I have written to Ulster Bank asking them to put me on interest only for the next 6 years.  I have explained the circumstances as above, so i shall await their response. 

If they refuse, as I expect they will, then I will switch to KBC for the longest term available (17 years). Although I will still pay my mortgage off on time when I reach retirement age using a proportion of the tax free lump sum.


----------



## Figrus (26 May 2019)

Have you entered figures into the susi website? Two children attending college away from home would be awarded circa €13,000.  Maybe you or your wife could consider dropping work days the year before they start in order to qualify? 

We have children in college who live away from home . They live in student accommodation (€4500). They come home every weekend (approx €15 return).  So don't allow them study miles away as weekly transport costs will rocket. They spend €20/month on phone.  They are sent back with around €25 of aldi/lidl groceries each.  They buy vodka (€8).  And we transfer over €20 per week for miscellaneous  (taxis to clubs, coffee, house gets takeaway etc).  Text book costs are minuscule but that may be their courses University term times are remarkably  short so that is a saving too. They also have parttime jobs.


----------



## Allpartied (27 May 2019)

Thanks Figrus, yes I have looked at SUSI funding.  My salary is 71256 pa, but I can earn a bit more with overtime available.  If my wife gives up work completely, and I throw the maximum amount into my pension, then we will qualify for circa 18000 Euros in assistance, during the years when we have 3 children in college.  
We won't really be any better off, day to day, as the reduction in salary, will roughly match the funding.   It's very tempting though, as the thought of slogging away in her stressful job, for absolutely no gain, is a major incentive for her to pack it in all together. 
Dublin accomodation is 6-7k, minimum, but Limerick or Galway would be a bit cheaper.  If they share an apartment together could be cheaper too.  
They do work and they are frugal enough ( buying second hand, using bargain basement shops) so I have no complaints there.  
The budgeting will be very tight, but I guess we will get through it like everyone else.  
A state run student loan option would make life a lot easier,can't imagine why it's not available here like most countries.


----------



## Figrus (27 May 2019)

It is a mad system. We had a college fund started when our kids were tiny. Sans recession, we would have saved enough and payed off our mortgage before they started. We are public sector and took a 40 percent paycut (overtime also stopped), which was never reinstated.  So saving for college was minimal.  It was a happy day when we realised we qualified  for susi.

Maybe your wife could give up work and  study alongside them too, with susi help too, if she doesn't already have a degree.


----------



## Allpartied (28 May 2019)

Same here, both of us public sector.  I'm on a good salary, no doubt.  But my mortgage was set in 2005, Celtic Tiger height, my wages then were sufficient to meet my mortgage and put away some cash for college costs.  As you say, big wage drop, big tax hike, child benefit cut and mortgage unmoved. 
My mortgage still takes a much bigger chunk of my monthly salary than it did in 2005 and we have prioritized paying it.  We are not alone, of course, plenty in this situation, plenty even worse off, but it's unprecedented really for mortgage holders to spend 15-20 years paying off a loan which is becoming more burdensome as time goes by, certainly over 20 years. 

My wife has a nursing/midwifery qualification and nearly 30 years experience. To be honest, I think we would be better off if she chucked it in and did a bit of CIH childcare in the locality, but it's a real pity for such highly skilled staff to be in that situation.


----------



## Figrus (28 May 2019)

We are putting are heads down and finishing paying off our mortgage in 5 years as planned in 2000. This will free up €900/month, which was always earmarked to pay for child no. 3 education. We  will reassess then as I may want to reenter job market . In the meantime, thank God for susi. 

Incidentally,  I know many PAYE workers who have to refuse extra shifts/days as earning too much would impact on their kid's grant.


----------



## Bronte (29 May 2019)

Figrus said:


> Have you entered figures into the susi website? Two children attending college away from home would be awarded circa €13,000.  Maybe you or your wife could consider dropping work days the year before they start in order to qualify?
> 
> We have children in college who live away from home . They live in student accommodation (€4500). They come home every weekend (approx €15 return).  So don't allow them study miles away as weekly transport costs will rocket. They spend €20/month on phone.  They are sent back with around €25 of aldi/lidl groceries each.  They buy vodka (€8).  And we transfer over €20 per week for miscellaneous  (taxis to clubs, coffee, house gets takeaway etc).  Text book costs are minuscule but that may be their courses University term times are remarkably  short so that is a saving too. They also have parttime jobs.


Is this correct:

Fees: €3000
Accommodation: €4500
Travel €15 X 35 weeks = €525
Food €25 X 35 weeks = € 875
Phone €20 X 9 months = €180
Pocket money €20 X 35 = €700
Books: ?
Total = €9780

(52 weeks in the year. Less summer June to August of 13 weeks, 2 weeks Xmas, 2 weeks Easter, is their mid term in university?)

What groceries do you buy for them?
I presume that is a house share arrangement.    If that were Dublin how much would it cost. Maybe it is Dublin.  

Is there tax relief available on any of that.


----------



## Bronte (29 May 2019)

Allpartied said:


> My mortgage still takes a much bigger chunk of my monthly salary than it did in 2005 and we have prioritized paying it.  We are not alone, of course, plenty in this situation, plenty even worse off, but it's unprecedented really for mortgage holders to spend 15-20 years paying off a loan which is becoming more burdensome as time goes by, certainly over 20 years.



Are you actually wise to prioritise paying it though?  I'm confused about the 15 to 20 years, that's a pretty small amount of time.


----------



## Figrus (29 May 2019)

35 weeks is correct. There is no midterm. Student is in galway.

Fees:€3000
Accommodation:€4500 (student accommodation village. Shared house (4people). Single room , shared bathroom. Next year accommodation is €3500 as student will be in a twin room ensuite.)
Travel: €15 x 35 weeks €525
Food:€25 x 35 weeks €875 
Phone :€20 ×9 months €180
Pocket money: €20 x 35 €700
Books/ compulsory day trips, equipment etc €400
Total: €10180

Susi:
Full tuition fees: €3000
Full maintenance  grant (more than 45km distance: €3025
Total:€6025

Shortfall:€4155

Student worked Saturday s (sesaonal) nd earned circa €1200. This was spent on clothes etc and some is saved to pay for driving lessons.  Student has a summer job.


----------



## Figrus (29 May 2019)

No idea if there is tax relief. I simplified it by implying we only have one student in college. The first year is a learning curve.  Food bill decrease as time goes on as they learn to cook fast and economically (copying each other in house and having kitty for toilet paper etc).  Our food bill at home lessens as we are feeding less.

Travel home varies as they cage lifts from parents and friend's parents and figure out price  differences between bus companies and trains, student discounts and prebooking online.


----------



## RedOnion (29 May 2019)

Figrus said:


> No idea if there is tax relief


Assuming it's qualifying course, you get 20% relief on the amount in excess of 3k per year. In practice no relief on 1st students fees, and 20% thereafter.


----------



## Figrus (29 May 2019)

We don't pay fees though. Susi pays college directly. And then transfers over maintenance grant to student's account every month for 9 months. We do a direct debit out of her account into our account to pay for accommodation (two lump sums in August and December).


----------



## RedOnion (29 May 2019)

Figrus said:


> We don't pay fees though


Sorry, yes of course.  With the grant there's no tax relief, as you're not paying the part that's eligible.


----------



## Bronte (29 May 2019)

RedOnion said:


> Assuming it's qualifying course, you get 20% relief on the amount in excess of 3k per year. In practice no relief on 1st students fees, and 20% thereafter.


20% of what?  Fees? As I understand it the 3K fee isn't called a Fee.


----------



## Bronte (29 May 2019)

Thanks Figrus for the detail.   I googled but could only get charts/graphs from Insurance companies who were trying to sell college saving schemes.  Cold hard figures are much better.  Will your children go abroad to work during the summer?  Or have a summer job in Ireland now there's full employment? My sister tells me it's too costly to go to America like we did back in the day.


----------



## Figrus (29 May 2019)

You are welcome. I could never find exact figures either. Ten grand a year is bandied  around as the college cost for a student to live away from home and it has proved to be accurate. We could tighten up her allowance and food bill but it is not worth the hassle and arguments. Plus I like to know she has some money in her account to get a taxi home or buy phone credit if she is stranded.

As an aside, my niece attends trinity and cycles to college from the family home. It costs my brother the same as us to send her to college even though we get the full susi college grant. 

However, there is the argument  that they get the full college experience  if they live away from home!!

Daughter has a work placement  in Ireland this year so wont be travelling abroad.  She will put the money she earns towards driving lessons/insurance because we live rurally and have no public transport  around. So she is mad keen to be independent on holidays etc..... 

If I had a crystal ball, I would maybe have chosen to live elsewhere....But if I was rich and canny enough, life would be a financial breeze no matter where we lived.


----------



## demoivre (29 May 2019)

Bronte said:


> 20% of what?  Fees? As I understand it the 3K fee isn't called a Fee.



It is a student contribution charge. EU students studying in the EU don't pay fees as it's fees free first time around. There are several different levels of grant which depend, in the main, on income levels. So while some folks might not qualify for  a full maintenance grant they may get a part maintenance grant, or if not some or all of the student contribution charge might be paid by SUSI. More [broken link removed].


----------



## Figrus (29 May 2019)

There is also a susi special  rate award.


----------



## Allpartied (29 May 2019)

Bronte said:


> Are you actually wise to prioritise paying it though?  I'm confused about the 15 to 20 years, that's a pretty small amount of time.



Well, we thought paying the mortgage, every month and on time was best.  It's the biggest debt and it is a secured debt so there is a risk of losing the asset if you don't pay.  
At this stage i am thinking of not prioritizing this debt and trying to arrange an interest only payment for  the college years. Then paying off the remainder of the mortgage loan with a chunk of the  retirement lump sum. 

We originally mortgaged in 1998, a 25 year mortgage with Irish Nationwide, I was 32 and my wife 30, then we remortgaged in 2005.  The remortgage was to buy a bigger house after the children were born.  Second mortgage was for 20 years, so we have 6 years to go. I didn't want to be paying a mortgage in my 60's and still don't intend to. 

My point was that the experience in 2005 was that if you mortgaged, that mortgage became a smaller debt as time passed by.  Inflation and pay rises, meant that most people, after 10-15 years would find the mortgage would not be that burdensome. My older sister bought her family size house in 1985, in London, for 30k, with a 25 year mortgage. After 20 years, paying a 30k mortgage in 2005 was like paying a car loan, except much cheaper. That's not the case for mortgage holders now.  It is looking quite likely that these mortgages will continue to be an extremely high slice of people's salary every year, for the whole of the mortgage.


----------



## RedOnion (29 May 2019)

Bronte said:


> 20% of what?  Fees? As I understand it the 3K fee isn't called a Fee.


The "student contribution" qualifies for tax relief


----------



## Allpartied (29 May 2019)

Figrus said:


> 35 weeks is correct. There is no midterm. Student is in galway.
> 
> Fees:€3000
> Accommodation:€4500 (student accommodation village. Shared house (4people). Single room , shared bathroom. Next year accommodation is €3500 as student will be in a twin room ensuite.)
> ...



Thanks for that Figrus.   I will be on a similar budget for my crew.  We have 4, all very close together.  We won't get SUSI funding, at least not initially, so it will be 

2019/20  1 college =  10000

2020/21   1 at college= 9000 (hopefully cheaper accomodation) 

2021/22   2 at college = 18000 
         -        SUSI assistance= 60000 (student registration fee only) 

Total req  = 12000

2022/23    3 at college =25000 
          -      SUSI assistance =  18075 ( student reg fees and maintanence of 3025 per child) 

Total requ =   7000 approx

2022/23    3 at college, as above. 

2023/24     3 at college, as above

2024/25     2 at college   = 12000 required

2025/26   1 at college  = 10000

So, total required, for the whole period is, optimistically, 73000 Euros, and that is with SUSI assistance, which I'm not absolutely sure I will get.    My current savings available is 40k, so I have a 30k deficit to fund these years.  Hence my plan to reduce mortgage payments by either reverting to interest only, or extending the term for as long as possible. Hopefully, they will be able to earn a few quid themselves each summer (maybe 2k each), which would certainly help to bridge the gaps. They do have a good work ethic and the older ones are already working in local restaurants on the weekend, so that will have to continue.


----------



## demoivre (29 May 2019)

Figrus said:


> Ten grand a year is bandied around as the college cost for a student to live away from home and it has proved to be accurate



€10 to 12k is a fair enough estimate when they are not living at home and in college in Dublin. I've put two through in that scenario and have another two there at the moment. Roughly :

2x Student Contribution charge @ 3,000  = 6,000
2x 600 rent pm x 9 months                        =10800   Each has their own room but sharing a room can reduce this.
2x 70 per week pocket money x 35 weeks  = 4900 
Total                                                            =21700

The weekly spend is realistically closer to €100 per week as we buy them food to bring back when they're home at the weekend. There is a student centre levy in UCD of €250 pa which I didn't include , and is not covered by any grant  if your lucky enough to qualify.


----------



## Figrus (29 May 2019)

You are welcome, allpartied.  Depending on the personality  of your oldest, seriously consider putting them into a shared twin room with a stranger from day 1.  And save the €1000 (or €1500 with no ensuite).  The student accommodation  match 1st years with 1st years. And they  step in to sort any serious complaints.  We didnt realise how many students  shared with strangers , presumably for financial reasons or because they were late to apply  for accommodation.  And they all seem to have got on grand.


----------



## Bronte (29 May 2019)

Allpartied what you say about the facts of mortgages hold true if you had like your sister stayed in the original house. You’re making zero allowance for the fact you upgraded to a larger house. I’m in the same situation, albeit owning the origins house outright as it’s term ended. But the cost of that was minuscule in today’s terms when I compare it to what I’m paying for our current home. But this asset is going to be worth a lot more than our previous first home in Ireland.

Not sure I’d agree with you about paying the mortgage into your sixties. Particularly if you are going to be earning and if you’re cash poor now to fund the education.


----------



## Bronte (29 May 2019)

demoivre said:


> €10 to 12k is a fair enough estimate when they are not living at home and in college in Dublin. I've put two through in that scenario and have another two there at the moment. Roughly :
> 
> 2x Student Contribution charge @ 3,000  = 6,000
> 2x 600 rent pm x 9 months                        =10800   Each has their own room but sharing a room can reduce this.
> ...


Great to have more actual experiences. We are looking at options and countries. In Ireland it is clear Dublin is the most expensive. Can you elaborate on the accommodation, particularly as regards first year. If you prefer not to say location, could you pm me. I had a look at what Trinity offers, seems like about 7k.

Are you getting tax relief? 

And I’m guessing Figrus is talking about Corrib village. But maybe not.


----------



## misemoi (30 May 2019)

A little OT but if any of your children are interested in studying for accounting or insurance, I have seen some school leaver apprenticeships that allow for part time study to get qualifications.  The Central Bank also do one where they pay you a salary and a Business Degree is funded.  Not massive salaries I'm sure for Dublin but an alternative with a long term career path.


----------



## Figrus (30 May 2019)

https://www.corriboil.com/free_student_accommodation_competition/

Corrib oil ran a competition last year to win free student accommodation. They researched approximately how much it is for student rent in each county
 As per link above.


----------



## Figrus (30 May 2019)

I have heard from friends that there isn't a huge difference in the price of  student accommodation between Dublin, cork, limerick and galway. However,  most students like to return home  at weekends and it is that weekly train/bus fare between home and college which can impact hugely on college budgets.


----------



## Allpartied (30 May 2019)

Bronte said:


> Allpartied what you say about the facts of mortgages hold true if you had like your sister stayed in the original house. You’re making zero allowance for the fact you upgraded to a larger house. I’m in the same situation, albeit owning the origins house outright as it’s term ended. But the cost of that was minuscule in today’s terms when I compare it to what I’m paying for our current home. But this asset is going to be worth a lot more than our previous first home in Ireland.
> 
> Not sure I’d agree with you about paying the mortgage into your sixties. Particularly if you are going to be earning and if you’re cash poor now to fund the education.



Well, although I moved from one house to another, I also moved location.  So the mortgage stayed the same, with a slight adjustment on the term.

There is nobody, nobody, not one single soul in this country who took out a first mortgage in the first few years of this century, sitting on the kind of asset accumulation which those who mortgaged in the 80's or early 90's were sitting on after 20 years. 

I've explained how I intend to manage the cash flow in the next few years.  I will maximise my tax free lump sum, which, incidentally, will make my eligible for SUSI assistance.  I will apply for interest only period, or extend the mortgage for the maximum period allowable. I will then use the tax free lump sum at 60 to pay off the remainder of the mortgage.


----------



## Allpartied (30 May 2019)

Figrus said:


> I have heard from friends that there isn't a huge difference in the price of  student accommodation between Dublin, cork, limerick and galway. However,  most students like to return home  at weekends and it is that weekly train/bus fare between home and college which can impact hugely on college budgets.



2 bed apartments in Limerick are renting for around 1100 per month,   2 bed apartments in Dublin (North inner city) are renting at 2300 euro plus. 

On campus Student accomodation is also more expensive in Dublin, by a considerable margin, which I think is a bit cheeky.  

But yes, the weekly trip back could get pricey.  Maybe the could make friends with someone who drives and lives nearby.


----------



## noproblem (30 May 2019)

Allpartied said:


> 2 bed apartments in Limerick are renting for around 1100 per month,   2 bed apartments in Dublin (North inner city) are renting at 2300 euro plus.
> 
> On campus Student accomodation is also more expensive in Dublin, by a considerable margin, which I think is a bit cheeky.
> 
> But yes, the weekly trip back could get pricey.  Maybe the could make friends with someone who drives and lives nearby.



Do you mind me asking if there's any possibility of you inheriting anything value wise over the next few years, or have you even considered it? By the way, i'm not prying or trying to be nosey but sometimes reality in life is overlooked.


----------



## lledlledlled (30 May 2019)

My God, alarming thread. Mine are 4yrs old and 3mts, and I'm starting to think I've left it too late to save for college!
Just joking,  but a lot of money obviously needs to be put aside for this period. 

We're overpaying our mortgage as much as we can afford to in the hope of having smaller repayments in the future and being able to save for the college years when the kids finish primary school. 

I have to main issues with my plan...
1) my overpayments are quite a struggle to meet but are relatively small. So they don't have a huge impact on reducing the next repayment due
2) how do I know when to stop the overpayments and switch to saving hard cash for college? The plan to switch after primary school is a pure guess  and not based on any calculations 

I live in Dublin so hopefully kids will live at home during college. Also hoping transport costs will be minimal i.e. limited to the cost of repairing a bike puncture!


----------



## lledlledlled (30 May 2019)

Allpartied said:


> 2 bed apartments in Limerick are renting for around 1100 per month,   2 bed apartments in Dublin (North inner city) are renting at 2300 euro plus.
> 
> On campus Student accomodation is also more expensive in Dublin, by a considerable margin, which I think is a bit cheeky.
> 
> But yes, the weekly trip back could get pricey.  Maybe the could make friends with someone who drives and lives nearby.



Back when  I was hanging out with students, I recall they country based ones tended to go home weekly in the first year or two, and much less frequently thereafter.  
It varied depending on how far away home was and how much study the difficulty of the course involved,  and how well settled they were with college friends.  

Staying in digs with a family used to be a great way to transition away from home, especially for 1st yr students. It might not be as common nowadays but might be worth considering for some.


----------



## demoivre (4 Jun 2019)

Bronte said:


> Great to have more actual experiences. We are looking at options and countries. In Ireland it is clear Dublin is the most expensive. Can you elaborate on the accommodation, particularly as regards first year. If you prefer not to say location, could you pm me. I had a look at what Trinity offers, seems like about 7k.
> 
> Are you getting tax relief?
> 
> And I’m guessing Figrus is talking about Corrib village. But maybe not.



Tax relief  is small, first €3k disregarded IIRC and then 20% of the second €3k.  Some folks like to get their kids on campus in first year , especially if they aren't familiar with eg  Dublin /Cork or don't have siblings there already. DCU and UCD , both of which I know well, randomly assign accommodation. My first two kids, now finished college, both got campus accommodation in first year , one in St Pats DCU , the other in UCD. St Pats DCU was around €4k  back then 6 years ago , UCD was around the €6k mark, 5 years ago. UCD have several different residences and a big price variation between them which you'll find on their website.  After that they got houses with fellow students, one in Drumcondra the other in Clonskeagh where they remained for the rest of college. Both houses acquired through contacts made in college. In both houses the sitting room was turned in to a bedroom to get an extra student in to reduce rent costs. Each had their own room. Rent in Drumcondra was €375 pm plus bills, in Clonskeagh it was €550pm plus bills, both 9 month contracts.

The two  I have in college at present stayed in digs in First year as they didn't get offered campus accommodation in DCU or UCD initially. Glasnevin digs was €110pw , Blackrock digs was €150 pw, both 9 month contracts. Digs accommodation is typically Sunday night to Friday morning . Both remained in their respective accommodations for the first two years. The DCU student is now moving to a house in Ballymun, sharing with other students paying €600pm, plus bills , own room 12 month contract but will be working in Dublin next summer so needs the 12 month contract. UCD student remaining in Blackrock with no change to contract.


There are many variables at play in Dublin that affect rent such as Area, own room, length of contract, forgoing sitting room for extra bedroom, food included in digs, to name a few. Even with an area there can be considerable variations. Two years ago in Santry/ Glasnevin we looked at three digs accommodation with prices of €600, €550 and €440 pm. The €440 was by far the best and the closest to DCU ! I was about to pay the deposit on the €600 pm one and fortuitously discovered the €440 one , which was a nicer house and very close to the college.

Just to say digs is usually a weekly payment so the €110 pw is slightly more than €440 pm as there are more than 4 weeks in a month, but it all adds up !

Enjoy your kids


----------



## Allpartied (16 Jun 2019)

noproblem said:


> Do you mind me asking if there's any possibility of you inheriting anything value wise over the next few years, or have you even considered it? By the way, i'm not prying or trying to be nosey but sometimes reality in life is overlooked.


The short answer, No.  
My wife's father passed away three years ago, spending the last 7 years of his life in our house, under our care.  He had nothing to give us in material terms, but my children will have the memory of him being with us, telling his stories and delighting them with his prescence in their lives. 
My mother in law, sadly passed away over 20 years ago.
Both my parents are still alive and in good health.  They have nothing of any material value, living in a rented house and surviving on the state pension.


----------



## Laughahalla (20 Jun 2019)

Allpartied said:


> A state run student loan option would make life a lot easier,can't imagine why it's not available here like most countries.



They have this in the USA and people are crippled with massive debt for life. Borrowing is not the answer and is definetly not the easy option.  





__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com


----------



## Allpartied (26 Jun 2019)

Laughahalla said:


> They have this in the USA and people are crippled with massive debt for life. Borrowing is not the answer and is definetly not the easy option.
> 
> 
> 
> ...



Obviously it is not a good idea to get into debt before you even start your working life. However, it is virtually impossible to go to third level education these days without going in to debt.  Of course, if your parents are wealthy enough they can subsidise the cost, but not everyone is so lucky.  

There are two options for people who do not have a wealthy parent to stump up 10k per year, per child.  

One is to work throughout the 4 years of the course, earning the money  required to fund themselves.  Generally these would be min wage jobs, (currently less than 10 euros per hour), so the student would need to work an average of 22 hours per week to get the requisite 10k ( remembering that even such a low wage still brings a USC of 500 euros) .   That is, of course, possible, but for many courses it would be difficult.  Many technical courses, such as nursing, medicine, vet, health sciences etc,  require full time attendance Mon to Fri, plus work based placements during June/July.  This, in addition to course work, projects and other independent study requirements, not to mention exam preparation, would leave the individual with virtually no free time. 
When I was at college, I did work a few hours a week, in a bar.  It got me a few quid pocket money, but not much more. .  However, I had hugely subsidised accommodation from the hospital where I studied.  My accommodation costs were 10 quid a month, in central London, in 1991.  Even allowing for inflation, that would equate to 18.80 pounds per month today.  Imagine that!!  These days accommodation costs in Dublin or London would be a multiple of hundreds. 
As I was studying a health service degree, which involved hospital based placements, I also got free food, as much as I wanted, from the staff canteen.  Oh, and a student grant, not means tested. It wasn't much, about 200 quid a month, but it paid for books, clothes, occasional drinks, well you know.  Third level education was genuinely free, in the UK,  for degrees, so there wasn't any of these "registration fees". 
This sounds like heaven now, but it was pretty normal back in the bad old days. If these figures were still the norm, then a loan would be unnecessary, but the world has clearly changed. 

The other alternative is  a govt based loan scheme, paid back when the graduate reaches a certain income figure.  This is the norm in most European countries and is, effectively, a graduate tax, payable for a period of years after graduation.  I would love to see a return to the day when students received the kind of service I got back in the day, but, if not, a sensible, well regulated, govt run loan scheme would be better than the current chaos.


----------



## Lord John (1 Aug 2019)

Allpartied said:


> Obviously it is not a good idea to get into debt before you even start your working life. However, it is virtually impossible to go to third level education these days without going in to debt.  Of course, if your parents are wealthy enough they can subsidise the cost, but not everyone is so lucky.
> 
> There are two options for people who do not have a wealthy parent to stump up 10k per year, per child.
> 
> ...


There is no shortage of work for teenagers / kids now. Why shouldn't they work 20 hours per week to assist funding?
I have 2 children coming up to college age and while I have savings to fund them.. they will certainly work to assist.
I've agreed with my oldest that I will cover fees but she will cover rent.... be that from summer jobs or weekend... 
McDonalds / Supermacs are great to learn responsibility and money management.

Any kid who wants to have their parents fund their college life needs to grow up.
Any parent who thinks their snowflake should be given 10K per year is deluded.

I did one of the most intensive courses in University, pretty much full time in engineering.
I still managed to work couple nights a week in a bar and weekends flipping burgers...

Students need to grow up and learn responsibility
Parents need to let the snowflakes grow up.


----------



## Laughahalla (1 Aug 2019)

Lord John said:


> Students need to grow up and learn responsibility
> Parents need to let the snowflakes grow up.



I think parents need to teach their children about the value of money and how to manage money better. 

For parents - Thinking about financing college when the child is about to go to college is too late. It's not as if it is a surprise that your child will get to college age eventually. You've had about 18 years notice.


----------



## Allpartied (6 Aug 2019)

Lord John said:


> There is no shortage of work for teenagers / kids now. Why shouldn't they work 20 hours per week to assist funding?
> I have 2 children coming up to college age and while I have savings to fund them.. they will certainly work to assist.
> I've agreed with my oldest that I will cover fees but she will cover rent.... be that from summer jobs or weekend...
> McDonalds / Supermacs are great to learn responsibility and money management.
> ...




OK, good on you. All my children have a very good work ethic.  The younger ones baby sitting for neighbours through the summer holiday. The eldest is already running  two jobs this summer, working in a cafe and Center Parcs.  Many of her Leaving Cert friends are off on an all expenses paid holiday in the sun, courtesy of wealthy parents. 
There is no danger of them being snowflakes and they will all contribute to their education, certainly no pocket money for socialising is coming from us.  We will sit down, carefully, with each of them and work out the best way of budgeting for those years. However, rental in Dublin is shocking.  Minimum 8k for 9 months, then 3k for registration fees, that's before books, laptops, travel costs. 
Make it 12k per year, per child.  Then multiply by 4. and then multiply that by 4. 
My original post was about extending my mortgage, so that I could assist, but be reassured we will do this together, and they will make their contribution.


----------



## Allpartied (6 Aug 2019)

Laughahalla said:


> I think parents need to teach their children about the value of money and how to manage money better.
> 
> For parents - Thinking about financing college when the child is about to go to college is too late. It's not as if it is a surprise that your child will get to college age eventually. You've had about 18 years notice.



Of course thinking about college years is good advice and saving regularly to create a fund should start as soon as the kids are born.  My further advice is don't live through the worst recession in the history of the state. Don't experience a 30% drop in salary. Don't any time off work to look after terminally ill parents. Don't buy a property just before the biggest property crash in modern history. 
If you can avoid these things, you should be fine.


----------



## Figrus (6 Aug 2019)

Well said allpartied.
And may I add, don't assume that illness wont affect the main earner in the house.  And even if you think you have it covered  with salary protection insurance, they only pay out 70 percent of your basic pay.


----------



## Bronte (9 Aug 2019)

Anybody have an idea of how much a weekly grocery bill would be for a student?  Food/cleaning/toiletries.  How do people organise this for their children.


----------



## Figrus (11 Aug 2019)

I can only answer for my student who lived in student accommodation and came home every weekend. Her and her housemates do not like to grocery shop.  At least once a month, they would wrangle a lift back and would bring stocks of pasta, toilet paper, rice,  beans, cereals, sauce jars  and frozen products. 

When travelling back on the sunday night by public transport they would pack fruit , yogurts, bread, milk etc for the 5 days.   They would also text a shopping list during the week to the parents. So basically their preferred food was added to the family shop.  The housemates informally  had a rota of whos turn it was to supply bin bags , sponges,  toilet paper etc.. noone fell out over that.  Overall, it didn't cost any more than when student lived at home.  A bit of forward planning is  needed though. 

We then gave €20 per week towards phone, bus tickets,  socialising  etc... our student had a partime job so she sorted her own clothes and makeup.

Some parents drop their kid back every sunday night via a lidl/aldi. Others bring 'Monday's dinner' in a lunch box.  They usually arrive home ravenous on a friday night.  None of them like wasting their own money on food. Hth


----------



## Figrus (11 Aug 2019)

The €20 per week was transferred  over online to their account as they tap their card for everything  now such as taxis, coffee etc...


----------



## Allpartied (12 Aug 2019)

I notice that the govt has indicated that student reg fees will be frozen for the next 5 years.  This is to be welcomed, but the rest of the statement seems to be the usual kicking the can down the road.  No loan scheme, no improved  maintanence scheme, no subsidised accomodation, no increase in the academic year (with subsequent reduction in degree course length).  In short, sweet F.A. 
The people sending children to college over the next few years will be those who were battered by the recession.  They are the people who started families in 2000-2005, who got  themselves a celtic tiger mortgage, who saw the price they paid for their modest property plummet by 50%, or more, they saw their wages decrease, or disappear.  This group is now facing a large cost for further education and the only way to fund it, for many, will be to take out extortionate loans from the same financial institutions which blew up the economy in the first place. 

If the govt is not willing to subsidise full time students, then it should make some effort to provide a loan scheme. This should be for living expenses, not for colleges to gouge money out of people as happens in the UK, and should be modest enough ( say 6000 Euros per year). It should be a not for profit scheme with the interest rate linked to govt borrowing costs ( currently virtually 0%). This loan to be repaid by the graduate upon achieving a salary of 25k per annum, over a 20 year period.  Coupled with an increase in the academic year ( Sep to mid July) and a drop in course length to three years for primary degrees, this would make things much more manageable for those who don't have 12k per year, per student in their back pocket.


----------



## NoRegretsCoyote (13 Aug 2019)

There is a "squeezed middle" of people like the OP who do not have high incomes, but are still ineligible for grants.

Credit union or bank loans at 7%-8% over long terms are extremely expensive.

The state should do three things:
1) charge fees closer to the economic cost of degrees. Medicine should cost more than humanities. It would also stem the flood of EU students post Brexit.
2) give subsidised loans for fees only at 2% or so.
3) cut third-level places by 20% and incentivise apprenticeships instead.


----------



## Figrus (13 Aug 2019)

On the pat Kenny show today, the expert said that 70 percent of student receive grants or bursaries.  There must be very few squeezed middle. Or else some of those grants are minuscule.


----------



## HollowKnight (13 Aug 2019)

Figrus said:


> On the pat Kenny show today, the expert said that 70 percent of student receive grants or bursaries.  There must be very few squeezed middle. Or else some of those grants are minuscule.


When I went to college, the grant I received covered the bus and rail ticket for the term. No change from it.


----------

