The Guardian — Higher Education (substream within Education)

Should the Bank of Mum and Dad Pay University Debts?

UK families are grappling with whether to fund university costs or let children shoulder student‑loan debt, as average graduate debt tops £50,000 and a minority of borrowers now owe over £100,000. A recent Octopus Money survey shows 11% of parents have already paid tuition upfront, while experts like Martin Lewis warn this can divert savings from mortgage deposits and retirement. Student‑loan repayment depends on earnings thresholds – Plan 5 in England triggers repayments at £25,000 a year, with a 40‑year write‑off, whereas Plan 2 in Wales uses a £28,470 threshold and a 30‑year horizon. The decision hinges on each household’s cash flow, the child’s projected earnings, and the high interest rates attached to many loans.