Dr. Francis: To ask the Secretary of State for Education and Skills what measures he plans to introduce to (a) address concerns
about student debt and (b) improve retention rates in higher education. [108272]
Margaret Hodge: Our White Paper "The future of higher education" proposes a number of measures which address concerns about student
debt, particularly for students from low income families. In particular, from 2004/05 around 30 per cent. of students will benefit
in full from the new HE Grant of £1,000 per year and a further number will receive a proportion of £1,000. The grant will be
additional to the loan but students can choose to reduce their loan take up, including costly commercial loans, and hence their
future debt.
From 2006/07 the abolition of the requirement to pay upfront fees and new university bursary schemes to support lower income
students will also help reduce the need to borrow. The Government will continue to means test the first £1,100 contribution to fees;
at present only 40 per cent. of students pay the full contribution. In 2001/02, 43 per cent. of students received a full grant to
cover tuition costs and 16 per cent. received a partial grant, institutions that wish to charge higher, variable fees will be
required to enter into an access agreement with the Office for Fair Access (OFFA). The access agreement will cover proposals to
extend the bursaries and other financial arrangements they will offer, such as subsidised accommodation, travel, books, study aids
etc.
Student loans will continue to be offered at highly subsidised rates. Unlike commercial debt or mortgage there is no interest
charged other than inflation. From 2005 the threshold at which students start to pay back will be raised from £10,000 to £15,000,
helping new graduates and lower earners. This makes debt repayments lower and more affordable and repayments will continue to be
income contingent. The new Student Income and Expenditure Survey for 2002/03, currently being undertaken, will give authoritative
information about students' cost of living and anticipated debt.
We have asked the Higher Education Funding Council for England (HEFCE) to bear down on non- completion. To that end, HEFCE are
funding Action on Access to highlight and disseminate good practice in student retention. Further measures planned by HEFCE to
improve retention and increase information to potential students include: 1. Asking Action on Access to establish a target group of
institutions and work specifically with them to improve their retention rates. 2. Bringing together of Aimhigher: Partnerships for
Progression and Excellence Challenge under Aimhigher to create a more unified message for potential students. 3. Ensuring that
additional relevant information is put on the Higher Education and Research Opportunities (HERO) website to assist potential
students make informed decisions. 4. Working with the Department and other partners to establish a new HE Students Portal (HESP)
which will provide a dedicated information service to students, their parents and advisers.
HEFCE will take further steps in line with the proposals in the White Paper to ensure universities and colleges will be properly
funded for the extra costs of attracting and retaining students from non-traditional backgrounds.
The HEFCE have allocated £265 million to institutions in 2003-04 for widening access and improving retention. This figure recognises
the additional costs of supporting students from non-traditional backgrounds and thereby increases the likelihood that they will
complete their courses successfully. We expect HEFCE to come forward with further proposals for 2004/05 on how they intend to
implement White Paper proposals on funding HEIs who are not making progress on improving completion rates.