The Bank of Mum and Dad

March 3, 2009 10:41 AM

How do we best finance our daughter's Irish University career (we're in the UK)?

We're Irish, 8 years resident in UK. Daughter started a university course in Ireland last September.

Problem: we had saved enough for year 1 and Grandmother always offered to finance the rest. (Daughter contributes 20% through a summer job) But she very recently changed her mind as our daughter's focus has gone more towards the language and linguistics part of her degree course, as opposed to the Psychology part which Grannie favours.
We're very happy that she has discovered something in her first year that makes her passionate, so we support her choice and her results speak for themselves.
Daughter perfectly happy to get student loan but she has been turned down here in the UK as the course she accepted is in the Republic of Ireland. There is no student loan system in Ireland that we can identify.

So, as we had not planned on being in this position, we hadn't researched it enough, (and we are too ignorant of the tax system here. We are both PAYE workers) so Mefites, what are our best options?
We have good equity in our home and presently have a mortgage for about 50% of the current market value. Should we remortgage at these historically low rates and give her a loan from the Bank of Mum & Dad?
Do we gift her some money which might have tax advantages for us?
She will need approx 10,000 Euros a year as she gets a summer job that earns her a 2,000 euro surplus to put towards the costs

posted by Wilder to work & money (11 comments total)

has gone more towards the language and linguistics part of her degree course

What are the job prospects for these types of majors? Can she get where she wants to go without a graduate degree? Most student loans contain provisions to deal with graduate programs, where home equity loans do not. This would be the biggest determining factor for me, especially if I was looking at a degree that did not make me marketable right out of school. What you absolutely do not want, is to be stuck in some low paying, non-challenging job where 30% of your take home pay is sucked into an overpriced degree, and any sort of advancement requires a more expensive degree.

If it were me, I'd definitely be looking at a lower cost degree program or telling grannie I was taking psych classes. Financing education without a formal student loan framework can be tricky and might lead to hard feelings despite best intentions.
posted by geoff. at 11:30 AM on March 3

Sorry to give a non-answer, but if you're considering refinancing against your house, you need to hire someone who is licensed and insured to advise you properly on that. You could find some local Independent Financial Advisers via http://www.unbiased.co.uk/
posted by wilko at 12:36 PM on March 3

I'm a final-year student at an Irish university (UCC) from a background where money is also a problem and although my parents live in Ireland, I might be able to offer some advice that's vaguely helpful.

First, do you have any relatives in Ireland who might be willing to talk to their credit union on your behalf? Most Credit Unions are incredibly helpful with these sorts of loans and even if you rang up a branch local to where you're from, you might be able to talk to a sympathetic manager. Even if your daughter went to a branch and explained the situation herself, there's a good chance that she'd be helped out. I've known Credit Unions to be life-savers to people in these situations, with loans at next-to-nothing interest rates. If you haven't looked into this, I'd say it should be plan A.

Secondly, there's a raft of obscure grants that most people haven't ever heard of and, even though you're ineligible for the standard maintenance grant (living outside the country) your daughter may be able to find some that only require citizenship for eligibility, as opposed to residency. If she talks to her university's student welfare officer she might get help with this, but in my experience these guys are usually pretty useless, so she'll have to do most of the research by herself.

I'm not sure €12,000/year is necessary for living expenses. I'm outside Dublin, so costs aren't quite as high for me here as they are there, but even still, €12,000 is an extraordinarily high amount of money. If she's in campus accommodation, I would strongly advise getting herself a house sorted for next year because the difference, factoring in bills etc, can be between €1,000 and €2,000 over the course of the year (aside from the fact that houses tend to be MUCH more interesting, fulfilling places to live when you're in college). If you don't have any luck finding places on Daft.ie, have her talk to her university's accommodation office and they'll put her in touch with reliable landlords who want to get their places filled up early.

Does your daughter have a term-time job? Even if she only worked one eight-hour shift a week, she'd make >€2,500 over the academic year. As a fellow Arts student, I can attest that a job doesn't harm your studies at all. If anything, it gives you some very useful perspective on college life, which can become a little wrapped up in itself without that external reality check. Jobs aren't too easy to come by, but they aren't impossible, especially if she starts looking within the college right now for openings next year. College libraries, cafés and restaurants all have student staff, and most universities take on students as function staff, too.

Apologies for the huge reply, and I'm sorry that I can't be more specific. If you want more information, MeFi Mail me and I'll get back to you ASAP. Good luck!
posted by SamuelBowman at 1:25 PM on March 3

There is no student loan system in Ireland that we can identify.

There is but it's private - it's a bank loan for students and it comes right from AIB or BOI. Boards.ie would be the best place to ask about this - here's a thread that might be of interest. AIB or BOI woul be able to provide updated info - given the current banking loan crisis here, up to date info is needed.

I asked Twitter, and Irish Twitter said "Credit Unions." Your daughter will have a credit union local to her residence (and they all work very locally and only locally) and she should go in and talk to them about a) opening an account and b) getting a loan.

Having said all of that, a €30K loan from the Bank of Mum & Dad doesn't seem out of order to me if all other doors are closed. Is she likely to finish in the normal number of years?
posted by DarlingBri at 1:51 PM on March 3

If she's 23 or older your income becomes irrelevant, and she qualifies for a grant in Ireland if she's been resident since before Oct 1 the previous year.

I just had a trawl around the Higher Education Authority and it seems at least possible that even if she's 18/19 now she qualifies for tuition and possibly also a maintenance grant, depending on your assessed incomes, on the grounds that she's resident, an Irish citizen and neither eligible nor in receipt of a grant or loan from East Sussex County Council or Student Finance England.

Time to get expert advice from her campus welfare people on this one.

And her local Credit Union may have a bursary scheme she can avail of separately - lots do.
posted by genghis at 2:14 PM on March 3

Guys, all really useful answers. I completely forgot about credit unions. I'll get her on to that straight away.
And yes, Samuel, the 12,000 is based on her campus accommodation plus all other expenses, and the bills there were certainly higher than we expected, she will be looking to rent in a house next year.
Thanks a million!
posted by Wilder at 12:25 AM on March 4

I appreciate the Best Answer tick, but you should examine the answer from Genghis more closely. He actually read the grant application. She's an EU citizen and an Irish national and has been resident in the State for one full year; she may well be eligible for a maintenance Grant or Course Fees bursary. She needs to talk to Student Welfare about this; she's certainly not the only UK student on campus.

Good luck!
posted by DarlingBri at 12:37 AM on March 4

thanks, Darling Bri (and Gengis!) , the reason we didn't look at the grant issue was they take our income into account and she doesn't qualify on those grounds. Having said that I don't know if they look at her as independant since she was paying tax in Ireland for her summer job last year, June, July and August. Will also look into that.
posted by Wilder at 2:10 AM on March 6

Actually, no, as Genghis says, they would assess our income.

Rather confusingly the Studentfinance.ie site which is otherwise excellent says in this page

Note that if you are under 23 years of age on 1 January of the year in which you apply, your parent(s) or guardian(s) must be residing in the local authority/VEC catchment area since 1 October of the previous year

which seems to suggest she can't even make an application as we are resident in the UK.
posted by Wilder at 2:19 AM on March 6

and the new Student Support Bill which will affect 2009/2010 applications will exclude her application
New requirement to be resident in State for 3 of previous 5 years
posted by Wilder at 2:27 AM on March 6

The credit Union was the way through, thanks all!
posted by Wilder at 12:11 AM on April 3