According to the CSA Research Institute (2018), the financing of children’s higher education costs French families around € 7,000 per year and per child. Engineering school studies can increase the budget up to € 9,700 and business school studies up to € 10,700. This investment is therefore colossal for some families.
In addition, the “children’s higher education” budget does not only include enrollment in a school or university, but also total budget generated by student life – or accommodation, food, transport and the necessary equipment.
A noter. For those who still wonder, the law does impose on parents a obligation to maintain their children (including education as well as food and housing), regardless of the majority. This obligation often extends even beyond studies since entry into working life is often done today through a precarious contract, the income generated from which is not sufficient to meet the needs of the young adult (See article 371-2 of the Civil Code).
While parents have a duty to finance the education of children, the expense management can be kept by the parents (payment of registration, rent, invoices, letting the child manage daily expenses) or delegated entirely to the student according to his maturity in terms of finances, in order to empower.
To each family, each student, choose method which is best suited to its needs, resources and possibilities.
About the financing of studies, Partners Finances lists the various suitable banking solutions here.
Prepare the financing of studies: savings and loan consolidation
Children’s education is an important investment – important socially, but also in terms of budget. It is therefore essential to prepare this step as soon as possible, when possible.
Save to anticipate the financing of children’s higher education
To set aside the money necessary to finance the education of children several savings solutions may be of interest:
- a housing savings plan (PEL) in the name of the child,
- open a life insurance contract in the name of your child by depositing an amount which he will be able to dispose of when he comes of age,
- open a life insurance contract in your name, making your child the beneficiary of the capital in the event of death.
If you do it early, consider both long savings and a contract that authorizes withdrawals of funds. Otherwise, opt for tax-free solutions whereby the funds remain available at all times (Livret A type).
Credit consolidation: an effective alternative solution
For some families, it can be difficult or even impossible to save enough to cover the children’s education budget. This is particularly the case if the debt ratio is too high.
If you have more than two credits in progress reimbursement and nevertheless wish to finance your children’s education budget yourself, the consolidation of credits may prove to be an effective alternative solution!
Partners Finances explains why and how it happens.
The consolidation of credits, also called repurchase of credits, is a banking operation consisting in replacing its various loans and debts, whatever the creditor, by one substitute loan.
By extending the duration of this replacement credit, you will be able to lower your monthly payments by up to -60%*.
In doing so, you find a larger remainder to live in order to face the new burdens of your student.
At the same time, you can also request additional cash intended to finance studies (registration, accommodation, equipment, etc.).
This sum is directly integrated into the repurchase of credits and its reimbursement included in the new single monthly payment.
Aid and scholarships
Grants based on social criteria
This aid calculated on the basis of parents’ income, the number of children pursuing studies and the geographical distance. There are 10 steps conditioning an amount ranging from € 1,009 to € 5,551, paid monthly.
It also allows a full exemption from registration fees, as well as a priority for the allocation of student accommodation.
To do an online simulation, go to the CROUS / CNOUS website.
In order to reduce the cost of rent which is one of the most important in the student budget, CAF offers the ALS and the APL.
They are determined according to the student’s income ceiling, the type of accommodation, the amount of rent, the grant holder status or not.
To do an online simulation, go to CAF website.
What to do when you are not eligible for aid or it is not enough?
Many parents and students think they are not eligible for these aids, and often wrongly. It is therefore important to carry out all simulations to be fixed before trying other solutions such as student loans or consumer credit.
The need for the student to work during his studies, as well as the advantages and disadvantages of this strategy for avoiding or supplementing a loan vary from case to case. If student work tends to complicate their task, some do well and prefer this constraint to that of indebtedness. Others will need to devote all of their attention, effort and precious time to rest to be successful in their studies.
The other alternatives are consumer credit :
- either in the form of a student loan,
- or in the form of a personal loan taken out by the parents.
The student loan: a form of personal loan dedicated to studies
The student loan is a form of consumer credit allocated to education and subject to certain rules.
- Amount: between € 1,500 and € 45,000.
- The sum is granted according to the income of the student and his entourage.
- A necessary guarantee: this is often a parental guarantee; in this case, the income of the guarantor determines the student’s debt ratio.
The student loan guaranteed by the State allows you to borrow without a surety from a loved one (either that you do not have any, or that you do not want one). In this case, it is the State which guarantees 70% with the banks (excluding interest), via BPI France.
- Maximum amount: € 15,000.
- The interest rate is set by the bank.
- Conditions :
- be enrolled in an establishment in France to prepare for a French higher education diploma (university, IUT, DUT, business or engineering school… BTS…),
- be of French or EU nationality if French resident for at least 5 years,
- be under 28 years old.
- Repayment of all of its debt 2 years after graduation (total deductible) or split between the duration of studies and after them (partial deductible).
- 5 partner banks: Société Générale, caisse d’Epargne, COC, Crédit Mutuel, Banque Populaire. However, it is not necessary to be a customer of one of these banks to obtain the loan. In contrast, banks limit the number of state-guaranteed student loans they grant. It is therefore advisable not to wait.
A noter. The budget was increased by the State in 2021 as part of the “1 young person, 1 solution” plan.
Consumer credit to pay for your child’s higher education
If you don’t want your child to take out a loan on their own but don’t have the savings, you can apply for unaffected consumer credit, or a personal loan.
On the other hand, the interest rate will be higher to that of an affected credit such as the student loan.
Whatever your situation, you must therefore consider all possible options from savings to the consolidation of loans, through consumer loans, including student loans, as well as aid.
Do the simulations online from the competent bodies: