Dear Moral Money,

We have two children who are now young adults. We wanted to avoid them being burdened by the repayment costs of student loans.

We have been able to afford to pay for the tuition and accommodation of our first-born, our son, who is repaying the money to us interest-free now he is earning. 

However, we can’t afford to do the same for our second child, our daughter. This means that, unlike her brother, she must take out a student loan which will accrue interest. 

Can we ask our son to pay his sister’s student loan repayments?

In broad terms our eldest needs to pay back £40,000. We plan to ring-fence and invest the money that is paid back to maximise what is available to support our youngest.

As long as our daughter doesn’t have to pay back more than a further £40,000, ie total repayments of £80,000, then in principle that seems fair. 

With this system, one of them may lose out. The youngest may end up having to pay more than this sum due to a variety of factors such as inflation, her salary and the changing nature of student loans. Or if her debt ends up less than that amount then her brother will have overpaid.

JC, via email

It is admirable that you are trying to help both of your children equally. However, this requires such a delicate balance that one of your children will inevitably benefit more.

If you made it clear to your son that the £40,000 was an interest-free loan from the outset, then he should have no problem paying it back and you should spend it how you see fit.

However, your method could result in your daughter effectively receiving a free degree, and this could lead to resentment no matter how well they get on, so tread carefully.

While your daughter will end up with much more debt than your son, the outcome will only be equal if your daughter makes £80,000 in repayments over the next 30 years, which is incredibly unlikely. 

The amount she pays will depend heavily on how much she earns over the next 30 years, at which point the debt will be written off. In 2020 students left with £45,060 in loans on average, according to the Higher Education Policy Institute.

Interest continues to build after graduation, linked with inflation, which your youngest will accrue but your eldest will not. Those earning over £27,295 accrue interest at RPI plus an extra 0.15 percentage points interest for every extra £1,000 they earn, up to 3pc. 

If your daughter left university with £45,000 in debt and started on a salary of £28,000, assuming a 2.5pc annual pay rise, the debt would have grown to £96,829 after three decades, at which point it would be written off. 

However, she would have paid just £36,117 over this time – or, more accurately, he would have paid this for her. 

Assuming the slightly smaller loan size but the same starting salary and annual pay rises, your son will pay the full £40,000 over the same timeframe. This will leave your daughter with no debt, you with £3,883 plus any investment growth, and your son £40,000 out of pocket.

There are more variables to consider. The main factor in what they pay will be the difference in their salaries over the next 30 years, as well as any career breaks or life events that will stop them from making payments.

Graduates only begin to pay back their loans once they earn more than £27,295 a year, fixed at 9pc interest of earnings over this amount. This means they will be paying back their respective loans at different rates. 

You have also suggested that your youngest could pay the first £40,000 of her student loan before you start to chip in. This means there will still be a disparity if she ends up paying more or less than this amount.

Alternatively, you could ask your eldest to pay you back just £20,000, and you could use this to fund £20,000 of your youngest’s loan. 

As they are likely to both pay more than this in the long run, they will have both benefitted equally from your input.

What do you think? Let us know in the comments section below and by emailing moralmoney@telegraph.co.uk.

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