Should the bank of mum and dad pay university debts?

Those planning for uni in England and Wales this autumn can apply for student loans from Monday. Here are the options for families worried about debt

Our child is heading to university soon – should we try to pay their tuition fees upfront so they are not saddled with a debt for decades?

Our child is a recent graduate and their student loan debt is ballooning – should we help pay off some or all of it?

Up and down the country, these questions are being asked and argued over as families try to navigate their way through the unfolding student loans crisis.

On average, young people now leave university with just over £50,000 in student loan debt. But some have seen what they owe rise dramatically: data issued this month shows that almost 180,000 now owe more than £100,000, and one graduate has a £314,000 debt.

A survey of 2,000 UK parents aged 45 to 65 commissioned by Octopus Money found that some have tried to take on more of the cost for their child in order to avoid large loan repayments later in life. One in nine (11%) had paid some or all of their children’s tuition fees upfront, with a smaller proportion (5%) helping their offspring make overpayments on their student loan(s) after graduation.

There is of course no one-size-fits-all answer for parents – every family’s financial situation is different.

Also, some would argue this is “a well-off people’s problem”, as many families don’t have the luxury of being able to turn down the offer of student finance, or savings to pay off a graduate child’s debt.

But for some it is almost decision time: in England and Wales, those planning to go to university this autumn can apply for student finance from Monday (23 March).

Those with a child heading to university soon

Need to know With student finance, there are two types of loan available: the tuition fee loan, which covers the course fees, with the money paid directly to the university, and the maintenance loan, designed to help with living costs.

England, Scotland, Wales and Northern Ireland each have their own systems. (Tuition fees for eligible Scottish students are paid by the Scottish government.)

For example, in England, for the 2026-27 academic year, students can apply for a tuition fee loan of up to £9,790, and a maintenance loan of between £4,013 and £14,135 (depending on where they live and household income).

Both need to be paid back, and interest is charged from the day the first payment is made until the loan has been repaid in full or written off.

When your child starts repaying and how much depends on the repayment plan they are on – there are five different ones. For students from England heading to uni this year or (probably) in the next few years, it is plan 5, while for students from Wales, it is plan 2.

Remember: what your child will repay each month depends solely on what they earn, not what they owe. Graduates have to repay 9% of everything they earn over a threshold – for plan 5 this is now £25,000 a year, and for plan 2 it is now £28,470 a year. Plan 5 loans have a 40-year repayment period before they are written off, while for plan 2 loans it is 30 years. But plan 5 interest rates are lower: RPI inflation (the current rate is 3.2%) compared with between 3.2% and 6.2% for plan 2.

Your options Your child doesn’t have to take out these loans (although most do).

In terms of the tuition fees, the student – or, more likely, their parents – can pay the university directly. Each will have its own policy on this – many allow people to spread the cost over monthly or termly instalments, which will help those who can’t manage the whole lot in one go. The Queen Mary University of London website gives an example of a home undergraduate instalment plan where you pay 25% of the total tuition fee amount of £9,535 (the 2025-26 amount) before enrolment, which is £2,383, then seven monthly payments of £1,021.

Similarly, your child doesn’t need to take out a maintenance loan, although for many people this is their main source of cash while at university. However, it typically isn’t enough to cover all their living costs. Without one, there will need to be a plan for how your child’s living costs – rent, bills, food, etc – are going to be paid for. Students spend an average of £1,142 a month, which includes £529 on rent and £146 on groceries, according to a 2025 survey by the website Save the Student.

Also, when applying for student finance, your child doesn’t have to borrow the full amount if you want to pay some yourself – they can take as much or as little as they want, and that applies to the tuition fee and maintenance loans.

Your child will need to apply for student finance for each year of their course. Students can take out finance for whichever years they need, and every year is an individual application, says the Student Loans Company (SLC).

Tom Francis, the head of personal finance at Octopus Money, says that money used to pay fees now “is money you can’t use later, and there are often moments after university when parental support can feel especially valuable, whether that’s helping with a house deposit, rental costs or periods of unpaid work”.

Equally important, he says, is the impact on your own finances. “Many parents asking this question are also thinking about retirement, navigating rising mortgage costs and, in some cases, financially supporting ageing parents. Using savings to pay university fees may limit your ability to boost pensions, build emergency funds or manage later-life costs.”

When asked by a parent whether they should pay their daughter’s tuition fees so she doesn’t need a loan, Martin Lewis, the MoneySavingExpert founder, made a similar point, saying: “If you pay off her tuition fees now, that’s money gone that you can’t give her towards a mortgage deposit later … I would argue this isn’t your priority.”

Will Stevens, a partner at the wealth manager Killik & Co, says one of the most important things to consider “is the potential earnings of the child after they graduate because that makes a really big difference as to the affordability of the loan”. Some in high-paying careers could clear their debt reasonably quickly – but that won’t be the case for most.

Remember that your child will only make repayments when they earn more than the threshold (currently £25,000 a year for plan 5). If they never earn above it, they won’t pay a penny.

Of course, trying to predict future earnings is hard when your child is several years away from entering the world of work. Stevens says one option is to take the loan but put some money aside to potentially repay it depending on how your child gets on at university. You could invest this money and reassess when you have a better idea of their earning potential.

When asked about paying tuition fees upfront, Tom Allingham, a money expert at Save the Student, suggests that if parents have a lump sum available, probably the best thing is to give their child money towards their living costs while they are studying.

Those with a child at university now

Need to know Most undergraduate students from England currently at university have a plan 5 loan, as that is the one for people who started their course from autumn 2023 onwards. For students from Wales, it is plan 2.

Students at university now are charged interest the moment the first payment was made to them and/or their university. So even if they only started last autumn, they will already have accrued interest.

Your options The good news is that your child can take out finance when they need it.

So if your child started university last autumn and took the finance for the current academic year, they or you are not tied into continuing to do so. If funds allow, you can pay off some or all of their loan at any time.

The SLC website has a section outlining how you can make voluntary payments.

Those with a graduate child or children

Need to know The current row has focused on the estimated 5.8 million students from England and Wales who took out a plan 2 loan between September 2012 and July 2023.

Many of these graduates are having loan repayments deducted from their pay packet every month, but this figure may be dwarfed by the interest that is added to their debt each month. As a result, the sum they owe is getting bigger, not smaller.

The catalyst for this row was the chancellor’s decision to freeze the salary threshold for plan 2 student loan repayments for three years. This threshold, above which graduates have to repay 9% of anything they earn, is now £28,470 a year, and will rise to £29,385 next month, but will then stay frozen at that level until 2030.

Any remaining plan 2 loan debt is written off after 30 years.

Your options A lot of the above information and advice applies here, too. But this is the toughest category because in many cases the debt will be very big by now – perhaps £70,000 or £80,000 or even £100,000-plus.

You can voluntarily make extra payments or pay off the whole of your child’s student loan at any point. But bear in mind that they have to make repayments until the loan is fully repaid – which may leave some questioning whether it is worth paying just a bit off.

If you do nothing else, ask your child to provide you with up-to-date information from their student loan account about how big the debt is now, how fast it is growing, how much interest is being added each month and (if applicable) how much they are repaying each month. Then at least you know what you are dealing with.

There are a range of opinions on this topic. Killik & Co’s Stevens says that in his view: “If parents have the ability to overpay or repay portions of a plan 2 loan, it likely makes sense because the interest rate is so high.”

Save the Student’s Allingham says one of the main complaints graduates have is that they are trying to pay down their student loan debt but the balance isn’t decreasing, so they feel as though it is more difficult to save for a house deposit or starting a family.

Let’s take the example of a parent who is willing and able to pay off their child’s entire student loan debt of, say, £50,000. Allingham says: “If the reason your child is frustrated about their student debt is because it makes it difficult to save for a deposit, I’d argue the best thing you can do is cut out the middleman and just give them that £50,000 towards a deposit instead.”

Along with other experts, he also says that with the growing political pressure, the way plan 2 loans work may change. We can’t be sure what, if anything, will happen but “the tide is moving in the direction of changes … To wipe the debt now might not be sensible given that in six months or a year’s time, the terms might be changed so that it’s not such a burden on graduates.”

The consumer champion Lewis says people should not voluntarily overpay before trying to work out if this will actually help. For most plan 2 holders, he says, it is likely that smaller overpayments – of, say, a few thousand pounds – may still leave the graduate repaying 9% of their earnings for the full 30 years, “in which case the overpayments won’t have any impact, and you will have just flushed that money away without any gain”.

Some experts have argued that pretty much the only plan 2 people who should be overpaying are very high earners and those with very strong salary prospects.

The amount of variables make it impossible to provide a categorical answer as to whether overpaying makes sense for an individual, Lewis suggests. However, he has produced a template prompt that people can cut and paste into an AI chatbot such as ChatGPT or Gemini and then fill in their details. This may help give people “a rough idea”.

A stopgap option being explored by some parents who can afford it is to voluntarily repay just enough to ensure that their child’s plan 2 loan debt at least doesn’t get any larger.

One parent of a plan 2 graduate who is hoping to do this told us: “I’m not sure Martin Lewis would say it makes financial sense, but at least it [stopping the debt from getting any bigger] gives you options to clear it all [later].” The parent said they couldn’t just watch the debt get bigger and bigger: “It’s too depressing. So it’s a way of feeling more in control.”

‘I was horrified at the interest rates charged’

Ceri and her husband raided their savings to pay off the student loans of their two graduate children, at a total cost of about £80,000.

She told Guardian Money they did it so their daughter and son “can afford their rent and start to save for a house deposit”.

Asked if paying off the debt meant she felt relieved, Ceri, who lives in Wales, says: “I’m still fuming about it … I feel stressed about other children in the family, children of my friends who can’t afford this. My daughter’s partner’s loan is nearly £100,000.”

She adds: “I was horrified at the interest rates that were being charged … Interest is charged from the second they are given their loans.

“My husband and I were lucky enough to have the money in savings. So we paid the degree balance in full for both of them.”

Their daughter’s debt was about £35,000, while their son’s was about £45,000.

“It’s a huge amount of money – we’re lucky to be able to do it.”

Their debts were significantly lower than those of English students because Welsh students were paying lower tuition fees at the time, she explains.

Both children also did a master’s, but the couple told them they had to repay those loans themselves.

“I hadn’t appreciated that their degree loan and master’s loan are deducted at the same time from their pay. My son, who luckily went on to get a good job, was probably having about £300 a month deducted for his degree, and £130 for his master’s.”

‘I’m spending £10k a year supporting my son’

Charlotte*, 50, from London, says working out how to support her 18-year-old son through university without saddling him with long-term debt has been “bewildering”.

She says: “We’ve got a lot of graduates at work who talk about how much comes straight out of their salary every month. And we’re in London – they’re also paying London rent. It’s a struggle for them.

“So our view was that if we could afford to take some of that struggle away at source for our son, we would. But there’s so much conflicting advice.”

Charlotte – whose son started university last autumn – says that in the end they decided that while he would take out the £9,000 annual tuition fee loan, she would cover his living costs so he did not need a maintenance loan.

“His accommodation this year is about £6,000, and we’ve given him about £3,000 to live on. The expectation is that he’ll work during the holidays to top up his social spending,” she says.

Altogether, Charlotte estimates she is spending at least £10,000 a year supporting her son, including occasional emergency help. If she continues to cover accommodation next year, she expects the cost could rise to about £14,000 annually.

“It’s things like the ‘I’ve run out of money’ texts or needing a bit extra to buy his girlfriend a present,” she says. “It all adds up.”

Charlotte says parents face a difficult balancing act between helping their children and encouraging independence. “You want them to take responsibility for supporting themselves because they’re adults now. But at the same time I worry they’re going to have a much tougher time than previous generations. Rent is higher, unemployment is rising, and then on top of that, there’s potentially a lot of debt.”

Charlotte has two more children, aged 16 and 20. “I still don’t know whether we’ve done the right thing,” she adds. “And with my daughter, who’s 16 and likely to go to university, we’ll probably be going through the same decisions all over again.”

* Name has been changed

Weighing up the loan balance

How much does my graduate child need to earn to reach the point where their plan 2 student debt is getting smaller, not bigger?

There’s a useful (if depressing) interactive tool on the Institute for Fiscal Studies website that shows you how much your child would have to earn for their plan 2 debt to get smaller in cash terms year on year because they are repaying more than the interest that is being added.

For example, if their outstanding loan balance is £50,000, they would need to earn more than about £63,000. If their outstanding balance is £80,000, they would need to earn more than £84,000.

It suggests that even if a parent got their child’s loan balance down to, say, about £22,000, they would still need to earn more than £40,000 for the debt to decrease (because they are repaying more out of their salary than the interest that is being added).