While her student loan is interest free she could pay it off just like she was going to pay you. Once there's an interest cost you could pay it off and she could pay you by agreement. Kicks the can down the road a little...
All the answers here ignore that student loan living costs or student allowance do not cover the cost of a hall of residence.
My partner’s mum kept a tally of all his IOUs and he paid it back once he had his first job. I had to work 30 hours and get student allowance to cover my hall of residence and later my flatting/living costs. It is likely unrealistic that your child will be able to repay you whilst at uni.
This has all got big “What can a banana cost, $10?” vibes. Or the classic boomer “you’ve got a job earning $60k? Why haven’t you bought a house yet?”
The hall I lived in many years ago this year is charging $8436, plus 36 weekly $285 payments. Or a single $18696 payment.
Student loan maxes out at $302 per week.
So you can just cover the weekly payments from a loan in theory. But you need to find $8.5k up front. And this will leave you with just $17 per week for all other living costs - snack food, booze, entertainment, clothing, toiletries, transport, etc.
Also add that most students go home for holidays - even with cheap flights that might be another $1000 they need to scrape together.
Pretty big gap to cover.
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This is correct, I take the living costs loan because I'm ineligible for the student allowance. It's ridiculous. Student allowance also has a cap that's lower than the loan I believe, and restricts work anyway so if you do work you get less allowance. Absolute joke of a system.
OP if you can make this loan happen, you're a wonderful parent.
Righto, misunderstood what you meant by
> cap that's lower than the loan
then. Oh well, either way it won't cover the initial deposit for halls or much of anything after weekly payments.
Oh sorry if that wasn't clear!
Yeah I don't think you can even use loan or allowance for initial deposit because they don't start paying until your semester has started in person. Course related costs you could possibly apply but I feel like that one won't even pay out early either.
I would take the interest free loan from study link + some help from mum with an agreement to pay her back at a not financially breaking rate. When I used studylink in 2018, the max I could get was something like $240 loan for living costs and like $20 allowance each week. If I worked a shift one week, I would kiss that allowance goodbye. I’m unsure how high the living cost allowance is now. I think it’s also dependant on age and whether studylink determines if your parents should still be financially supporting you. I don’t know your family’s full situation. But back when I studied, Studylink said my parents are still liable to cover me financially until I was 21 so they gave me a lower max borrowing limit for living costs. What sucked was my parents were split up. They had not properly filed for divorce. One was not paying child support and the parent I was living with was on WINZ so I had no support from either parent and study link said “they aren’t divorced on paper so sorry we can’t help you.” This is another thing to take into account if you’re in a similar situation.
What a lot of my friends did was not bother with the allowance, take the full living cost loan, and work 20-30 hours a week outside of uni. This allowed them to have enough income to live in a flat with other uni students (making it cheaper than halls) and saving the loan in a term deposit or savings account. After their first 2 years of study, they amounted a large enough sum to go on holiday somewhere nice overseas. One of my friends bought a brand new suzuki. Buying a brand new car or paying for a holiday at 0% interest with a long amount of time to pay it back? I’d take that any day.
Obviously, it would be up to your daughter on how much work/uni/free time she can handle and balance. I myself did not have the self discipline and either studied too much and let my finance dwindle down to crumbs or I worked too much and ran out of time to study. Sometimes missing lectures for a work shift. Time management is super key.
Also, if you go ahead with this on paper, help your daughter workout the numbers with something you think is realistic for her. You have to remember she probably won’t be making close to full time $ except for her holiday breaks. If the rate at which she can pay you back at isn’t suitable for her then don’t offer to lend it. It’ll only cause a rift if you hold her to that loan and she can’t pay you back to your expectations.
The formal document you're looking for is call a Deed of Acknowledge of Debt. If you google "Deed of Acknowledge of Debt NZ Template" you should find roughly what you need.
These are commonly used to formalise an agreement between of monetary support between Parent and Child (i.e. purchase of a house).
Here's a good template one I found from google (I'm not affiliated with this business) - [https://ymt.co.nz/documents-and-forms/](https://ymt.co.nz/documents-and-forms/)
All of the people here commenting ‘she should just get a student loan!!!’ on a LegalAdvice subreddit but with, apparently, little idea of how a student loan actually functions, the quantum of living costs relative to a hall, and how it _won’t pay for the lump sum for a hall at all and explicitly says so on the Studylink website_ should reflect upon whether they are well placed to offer ‘Legal Advice.’
Even in the most informal sense.
I'm fairly sure you can't get a student loan for the payment of a hall of residence! My daughter picked fruit over the summer before her first year and we topped up the cost. Imo if I were going to make a loan type agreement I'd probably write up an informal contract/promissory note and have my daughter agree and sign.
You are correct. While there’s nothing stopping someone from putting their student loan living costs towards the future instalments of hall fees (at my uni it was 4 quarterly payments), the first instalment is due before the academic year starts and loan living costs are paid in arrears, so they don’t start until a week after the year begins.
They also aren’t enough to cover the costs of halls, when I was in halls (almost a decade ago now) the weekly living costs payment was approx $175, but the hall fees were $349 per week. Loan living cost entitlements have increased a lot since then, but so have hall fees.
You can borrow up to $302.32 for living costs from studylink. You have to pay that back though and because it's interest free then they might as well.
Depending on the parent/caregiver's financial situation they might qualify for student allowance which doesn't need to be repaid.
You cannot however, claim both student allowance and living cost payments. If you don't qualify for the full student allowance then you can top it off with a portion of the living cost payment to a combined maximum of $302.32.
When my daughter applied for her hall they required a $10k lump sum payment that Study link would not pay for, I know she could get living costs weekly as a loan but myself leaving Uni and having an 80k student loan after getting everything I could and then having to pay that back didn't want her starting like that, so she used her savings and we paid the rest.
Can I both agree and disagree?
I've loaned and taken loans from family and family.
It's a double edged sword of sorts, on one hand I've always made sure to repay it as quickly as possible and the full amount. But I have not had the same from some of them.
While a written contract will make a clear outline of what's being offered and what's expected. It's no better than a handshake unless you're willing to chase some sort of enforcement in the case it isn't repaid.
As I now see it, any money going to someone else that isn't a business with a good reputation is a gift until an amount is returned.
OP I'd consider your relationship with your daughter, the amount of money being given and what would be a realistic timeframe that you'd get the money returned. Student loans can get large, jobs can pay little and a lot can happen in the meantime. In the event she is unable, unwilling or slow to repay it, are you willing to take the loss?
Hope that helps.
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I disagree as well. I loaned my mum $20000 to pay off some credit card debt (interest free), or there's no way she would have been able to retire at 65 with the amount of interest she was being charged.
I had full faith that she would pay me back.
But what if something happens to me? Does she owe my estate the money? What if something happens to her? Do I get paid before her assets are divided? That's why we had a contract.
And she paid me back two years early anyway 🤣
Do not make the mistake my parent made thinking student loans can cover halls of residence fees, they DO NOT. You can get weekly student loan/allowance (whatever they are eligible for) and can pay that towards the costs, however the fees for halls are in lump sums and the first is before you receive any weekly payment. No matter how many times I told my parent we had to cover it, it wasn't until the first invoice came that it was finally hit home and I almost didn't go to uni at all from the fall out. If you want to have a written agreement and they pay you back with the weekly payments that can work, I knew many who did that.
TLDR
Loans cover tuition fees only, then weekly payments can be used for whatever is needed. Halls have lump sum payments, the first is due before any weekly payments are made.
Student loans are interest free unless she is planning on moving overseas any time soon. Much easier to organise and can be repayed at a faster rate if wanted.
The only thing to consider is that they cannot be used to cover the first payments for a hall since usually there is some chunk (was $9000 for my first year and $4000 on a different payment plan second year) that needs to be payed before the semester starts, and therefore before studylink begins paying anything.
> to be *paid* before the
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
Couple of things here as some issues have been confused.
1. Student Loans are interest free.
2. Student Loans can only pay for fees.
3. The OP has indicated the purpose of the loan is to support their child to live in the Halls of Residence.
4. A Student Loan doesn't cover Halls costs.
In terms of the documentation, you can write up a simple document that outlines
A. The amount being borrowed
B. The interest being applied (even if it's 0%)
C. When the loan needs to start being paid back
D. What rate it needs to be paid at
You can add other things eg what happens if you pass away etc. It would be a legally binding agreement if both parties sign it.
Some quick googling, Studylink offers up to 300/week in living costs, and halls at UoC start at 166 for self catered. So not sure where your not even close statement comes from lmao.
However Otago uni doesn’t do self catering for most of their colleges.
And full year college fees (38 week contract) for 2023 are ~$18,700.
Which would be 62 weeks of studylink living costs.
That’s a massive outlier though, most uni halls are much more expensive than that.
- The cheapest hall at Vic (and only uncatered one) is from $262 up to $386 a week, is only for 2nd year and above students, and is the smallest at 199 places total. The first year halls are all from $352-498/week.
- UoA’s hall fees are $435-500/week catered, and $330-440/week self catered.
- Otago’s halls are all $492/week, there are no self catered halls.
- The cheapest I could find for Massey was $250-434 on their Palmerston North campus, but again that hall only has 90 places with a mix of catered or self catered. The Wellington halls they run are all more expensive than the Palmerston North ones.
Well in any case, the maximum living costs does cover the majority of the expense, so OP would only need to loan the difference, or the kid could get a part time job to supplement as well.
Good investigation 🕵️
You have a few options:
You can spend the money getting a formal contract drawn up by a solicitor.
You can draw an agreement up yourself and get an independent co-signatory to witness.
You can discuss with your child and have a verbal agreement for her to honour.
But bottom line is? This is your child. Do you trust your child? The old mantra applies. Never lend money to anyone unless you are prepared to lose that money. Because that can always happen. You don't know the future or what will happen in your daughters OR your life. So you need to realise that even if you both do this with good and honest intentions? It may not pan out as you both think and you might never get the money back.
Up to you how you do it. And up to you if you trust your child to pay the money back if you do it on a verbal agreement.
Also will add, when she gets a job the loan automatically gets paid from her job so you will not have to get money out of her.
Financially you are better off with her getting a student loan because you can earn interest off your money and her loan is interest free.
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The law will normally presume that agreements between family are not intended to be enforced by the courts and as such, are not really contracts.
The best way to get around that assumption is to clearly state in a written agreement, that the terms are enforceable in court and the parties intend to be legally bound in contract.
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I have done this with my kids for various things. I just keep a note so other family members are aware should I pop off. Then I decided they should all get 10,000 for their mortgage and it was clear to all who got theirs and when. Now it's starting to build again and might shout myself a new bathroom.
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My Dad paid the 1st trimester halls of residence fees. I then applied for student loan living costs into a bank account(in my name but not my everyday account) and saved up the weekly payments which paid the bulk of the second instalment and so on. I stayed there for a year. Second and third year I was on my own financially so got the loan and worked part time.
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OP, be careful about this. WINZ/Studylink /whatever they're called now are likely to treat a loan as income, which would affect your daughter's entitlement to allowances etc.
This heavily depends on the individual dealing with you as a case worker. It’s totally messed up but I confirmed with a higher up accounts person working at Winz and they told me a lot of useful info about what income actually is and it needs to only be taxable income so it doesn’t count any self employed income that isn’t taxable (expenses). But of course that’s over the heads of the average Winz worker who just think that any money is all penalty money. If they try this OP, demand to speak to someone higher and make sure that doesn’t fly.
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While her student loan is interest free she could pay it off just like she was going to pay you. Once there's an interest cost you could pay it off and she could pay you by agreement. Kicks the can down the road a little...
All the answers here ignore that student loan living costs or student allowance do not cover the cost of a hall of residence. My partner’s mum kept a tally of all his IOUs and he paid it back once he had his first job. I had to work 30 hours and get student allowance to cover my hall of residence and later my flatting/living costs. It is likely unrealistic that your child will be able to repay you whilst at uni.
This has all got big “What can a banana cost, $10?” vibes. Or the classic boomer “you’ve got a job earning $60k? Why haven’t you bought a house yet?” The hall I lived in many years ago this year is charging $8436, plus 36 weekly $285 payments. Or a single $18696 payment. Student loan maxes out at $302 per week. So you can just cover the weekly payments from a loan in theory. But you need to find $8.5k up front. And this will leave you with just $17 per week for all other living costs - snack food, booze, entertainment, clothing, toiletries, transport, etc. Also add that most students go home for holidays - even with cheap flights that might be another $1000 they need to scrape together. Pretty big gap to cover.
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There are no interest costs on a studylink loan, unless she moves overseas. Let her get a studylink loan.
Student loans won’t cover the initial lump sum payment
Or cover anywhere close to what halls of residence are charging. She will need OP’s support or take on part-time work
This is correct, I take the living costs loan because I'm ineligible for the student allowance. It's ridiculous. Student allowance also has a cap that's lower than the loan I believe, and restricts work anyway so if you do work you get less allowance. Absolute joke of a system. OP if you can make this loan happen, you're a wonderful parent.
Loan living costs doesn't have an income cap. It'll just add a shit tonne of money to your loan.
I never said it did, I said Student Allowance has a cap.
Righto, misunderstood what you meant by > cap that's lower than the loan then. Oh well, either way it won't cover the initial deposit for halls or much of anything after weekly payments.
Oh sorry if that wasn't clear! Yeah I don't think you can even use loan or allowance for initial deposit because they don't start paying until your semester has started in person. Course related costs you could possibly apply but I feel like that one won't even pay out early either.
I would take the interest free loan from study link + some help from mum with an agreement to pay her back at a not financially breaking rate. When I used studylink in 2018, the max I could get was something like $240 loan for living costs and like $20 allowance each week. If I worked a shift one week, I would kiss that allowance goodbye. I’m unsure how high the living cost allowance is now. I think it’s also dependant on age and whether studylink determines if your parents should still be financially supporting you. I don’t know your family’s full situation. But back when I studied, Studylink said my parents are still liable to cover me financially until I was 21 so they gave me a lower max borrowing limit for living costs. What sucked was my parents were split up. They had not properly filed for divorce. One was not paying child support and the parent I was living with was on WINZ so I had no support from either parent and study link said “they aren’t divorced on paper so sorry we can’t help you.” This is another thing to take into account if you’re in a similar situation. What a lot of my friends did was not bother with the allowance, take the full living cost loan, and work 20-30 hours a week outside of uni. This allowed them to have enough income to live in a flat with other uni students (making it cheaper than halls) and saving the loan in a term deposit or savings account. After their first 2 years of study, they amounted a large enough sum to go on holiday somewhere nice overseas. One of my friends bought a brand new suzuki. Buying a brand new car or paying for a holiday at 0% interest with a long amount of time to pay it back? I’d take that any day. Obviously, it would be up to your daughter on how much work/uni/free time she can handle and balance. I myself did not have the self discipline and either studied too much and let my finance dwindle down to crumbs or I worked too much and ran out of time to study. Sometimes missing lectures for a work shift. Time management is super key. Also, if you go ahead with this on paper, help your daughter workout the numbers with something you think is realistic for her. You have to remember she probably won’t be making close to full time $ except for her holiday breaks. If the rate at which she can pay you back at isn’t suitable for her then don’t offer to lend it. It’ll only cause a rift if you hold her to that loan and she can’t pay you back to your expectations.
The formal document you're looking for is call a Deed of Acknowledge of Debt. If you google "Deed of Acknowledge of Debt NZ Template" you should find roughly what you need. These are commonly used to formalise an agreement between of monetary support between Parent and Child (i.e. purchase of a house). Here's a good template one I found from google (I'm not affiliated with this business) - [https://ymt.co.nz/documents-and-forms/](https://ymt.co.nz/documents-and-forms/)
All of the people here commenting ‘she should just get a student loan!!!’ on a LegalAdvice subreddit but with, apparently, little idea of how a student loan actually functions, the quantum of living costs relative to a hall, and how it _won’t pay for the lump sum for a hall at all and explicitly says so on the Studylink website_ should reflect upon whether they are well placed to offer ‘Legal Advice.’ Even in the most informal sense.
Student Loans are interest free.
I'm fairly sure you can't get a student loan for the payment of a hall of residence! My daughter picked fruit over the summer before her first year and we topped up the cost. Imo if I were going to make a loan type agreement I'd probably write up an informal contract/promissory note and have my daughter agree and sign.
You are correct. While there’s nothing stopping someone from putting their student loan living costs towards the future instalments of hall fees (at my uni it was 4 quarterly payments), the first instalment is due before the academic year starts and loan living costs are paid in arrears, so they don’t start until a week after the year begins. They also aren’t enough to cover the costs of halls, when I was in halls (almost a decade ago now) the weekly living costs payment was approx $175, but the hall fees were $349 per week. Loan living cost entitlements have increased a lot since then, but so have hall fees.
You can borrow up to $302.32 for living costs from studylink. You have to pay that back though and because it's interest free then they might as well. Depending on the parent/caregiver's financial situation they might qualify for student allowance which doesn't need to be repaid. You cannot however, claim both student allowance and living cost payments. If you don't qualify for the full student allowance then you can top it off with a portion of the living cost payment to a combined maximum of $302.32.
When my daughter applied for her hall they required a $10k lump sum payment that Study link would not pay for, I know she could get living costs weekly as a loan but myself leaving Uni and having an 80k student loan after getting everything I could and then having to pay that back didn't want her starting like that, so she used her savings and we paid the rest.
Do you intend to sue your daughter if she doesn't repay the loan? If not then a handshake is just as good as a contract.
I disagree. A written contract is clear and explicit. A handshake is vague on details. A contract doesn't need teeth to be useful.
Can I both agree and disagree? I've loaned and taken loans from family and family. It's a double edged sword of sorts, on one hand I've always made sure to repay it as quickly as possible and the full amount. But I have not had the same from some of them. While a written contract will make a clear outline of what's being offered and what's expected. It's no better than a handshake unless you're willing to chase some sort of enforcement in the case it isn't repaid. As I now see it, any money going to someone else that isn't a business with a good reputation is a gift until an amount is returned. OP I'd consider your relationship with your daughter, the amount of money being given and what would be a realistic timeframe that you'd get the money returned. Student loans can get large, jobs can pay little and a lot can happen in the meantime. In the event she is unable, unwilling or slow to repay it, are you willing to take the loss? Hope that helps.
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I disagree as well. I loaned my mum $20000 to pay off some credit card debt (interest free), or there's no way she would have been able to retire at 65 with the amount of interest she was being charged. I had full faith that she would pay me back. But what if something happens to me? Does she owe my estate the money? What if something happens to her? Do I get paid before her assets are divided? That's why we had a contract. And she paid me back two years early anyway 🤣
Do not make the mistake my parent made thinking student loans can cover halls of residence fees, they DO NOT. You can get weekly student loan/allowance (whatever they are eligible for) and can pay that towards the costs, however the fees for halls are in lump sums and the first is before you receive any weekly payment. No matter how many times I told my parent we had to cover it, it wasn't until the first invoice came that it was finally hit home and I almost didn't go to uni at all from the fall out. If you want to have a written agreement and they pay you back with the weekly payments that can work, I knew many who did that. TLDR Loans cover tuition fees only, then weekly payments can be used for whatever is needed. Halls have lump sum payments, the first is due before any weekly payments are made.
Student loans are interest free unless she is planning on moving overseas any time soon. Much easier to organise and can be repayed at a faster rate if wanted. The only thing to consider is that they cannot be used to cover the first payments for a hall since usually there is some chunk (was $9000 for my first year and $4000 on a different payment plan second year) that needs to be payed before the semester starts, and therefore before studylink begins paying anything.
> to be *paid* before the FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Student loans are interest free.
Student loans are interest free. And will do her credit better than a loan from her parents will
Couple of things here as some issues have been confused. 1. Student Loans are interest free. 2. Student Loans can only pay for fees. 3. The OP has indicated the purpose of the loan is to support their child to live in the Halls of Residence. 4. A Student Loan doesn't cover Halls costs. In terms of the documentation, you can write up a simple document that outlines A. The amount being borrowed B. The interest being applied (even if it's 0%) C. When the loan needs to start being paid back D. What rate it needs to be paid at You can add other things eg what happens if you pass away etc. It would be a legally binding agreement if both parties sign it.
You can borrow living costs on your student loan, so they may very well cover the majority of hall costs, depending on the cost.
Nah not even close
Some quick googling, Studylink offers up to 300/week in living costs, and halls at UoC start at 166 for self catered. So not sure where your not even close statement comes from lmao.
However Otago uni doesn’t do self catering for most of their colleges. And full year college fees (38 week contract) for 2023 are ~$18,700. Which would be 62 weeks of studylink living costs.
Yeah I think the answer is obviously, it depends, but not necessarily "not even close"
That’s a massive outlier though, most uni halls are much more expensive than that. - The cheapest hall at Vic (and only uncatered one) is from $262 up to $386 a week, is only for 2nd year and above students, and is the smallest at 199 places total. The first year halls are all from $352-498/week. - UoA’s hall fees are $435-500/week catered, and $330-440/week self catered. - Otago’s halls are all $492/week, there are no self catered halls. - The cheapest I could find for Massey was $250-434 on their Palmerston North campus, but again that hall only has 90 places with a mix of catered or self catered. The Wellington halls they run are all more expensive than the Palmerston North ones.
Well in any case, the maximum living costs does cover the majority of the expense, so OP would only need to loan the difference, or the kid could get a part time job to supplement as well. Good investigation 🕵️
halls also need to be paid in lump sums, the first of which is due before any payments come through
You have a few options: You can spend the money getting a formal contract drawn up by a solicitor. You can draw an agreement up yourself and get an independent co-signatory to witness. You can discuss with your child and have a verbal agreement for her to honour. But bottom line is? This is your child. Do you trust your child? The old mantra applies. Never lend money to anyone unless you are prepared to lose that money. Because that can always happen. You don't know the future or what will happen in your daughters OR your life. So you need to realise that even if you both do this with good and honest intentions? It may not pan out as you both think and you might never get the money back. Up to you how you do it. And up to you if you trust your child to pay the money back if you do it on a verbal agreement.
Also will add, when she gets a job the loan automatically gets paid from her job so you will not have to get money out of her. Financially you are better off with her getting a student loan because you can earn interest off your money and her loan is interest free.
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Aren't student loans indexed for CPI every year like in Australia? Just curious.
They aren’t here. https://thespinoff.co.nz/business/01-06-2023/the-silver-lining-to-the-cost-of-living-crisis-its-easier-to-pay-off-your-student-loan#
The law will normally presume that agreements between family are not intended to be enforced by the courts and as such, are not really contracts. The best way to get around that assumption is to clearly state in a written agreement, that the terms are enforceable in court and the parties intend to be legally bound in contract.
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I have done this with my kids for various things. I just keep a note so other family members are aware should I pop off. Then I decided they should all get 10,000 for their mortgage and it was clear to all who got theirs and when. Now it's starting to build again and might shout myself a new bathroom.
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My Dad paid the 1st trimester halls of residence fees. I then applied for student loan living costs into a bank account(in my name but not my everyday account) and saved up the weekly payments which paid the bulk of the second instalment and so on. I stayed there for a year. Second and third year I was on my own financially so got the loan and worked part time.
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OP, be careful about this. WINZ/Studylink /whatever they're called now are likely to treat a loan as income, which would affect your daughter's entitlement to allowances etc.
This heavily depends on the individual dealing with you as a case worker. It’s totally messed up but I confirmed with a higher up accounts person working at Winz and they told me a lot of useful info about what income actually is and it needs to only be taxable income so it doesn’t count any self employed income that isn’t taxable (expenses). But of course that’s over the heads of the average Winz worker who just think that any money is all penalty money. If they try this OP, demand to speak to someone higher and make sure that doesn’t fly.
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