§ 4. Mr. Nicholas Winterton
asked the Secretary of State for Education and Science if he will make a statement regarding his Department's investigations into the possible change in the way students of higher education in the United Kingdom are financed.
6. Mr. Teddy
Taylor asked the Secretary of State for Education and Science what is the policy of Her Majesty's Government on the substitution of student loans for grants.
§ 15. Mr. Foulkes
asked the Secretary of State for Education and Science if he will now undertake not to introduce a scheme of loans to replace the system of maintenance grants for students.
§ Dr. Boyson
My right hon. and learned Friend as yet has no firm proposals for change. My Department has established an internal group to consider the feasibility and merits of various systems for the support of students by means of loans, including combinations of loans and grants, and the group is expected to make its report before the end of the year. Any proposals arising would, of course, require much wider consultation.
§ Mr. Winterton
I am grateful to my hon. Friend for that very full and helpful reply. Does he agree not only that a combination of loans and grants would produce more responsible students, in the main—and all those seeking to undertake further and higher education—but that it 307 would also be likely that our institutions of further and higher education would produce courses that were relevant to the needs of this country?
§ Dr. Boyson
I welcome the contribution of my hon. Friend the Member for Macclesfield (Mr. Winterton). One advantage of loans—if we decide that this is a feasible method—relates to the work ethic in which my hon. Friend and I both believe. There is also the question of possible savings. There is, further, the likelihood that people going to university will then assess the end result of their degree and its use for the rest of their life, and whether there will be a return to society. I shall take into consideration all the points that my hon. Friend mentioned.
I appreciate what the Minister said, but will be consider very carefully whether a full transfer from grants to loans might not create a major problem in facing young people with enormous repayments at a time when their obligations are extremely high for house purchase and marriage? If the Minister is looking for more money, will be look at the financing of student unions, as it appears that some of the cash brought in by them is used in a quite shameful way?
§ Dr. Boyson
I think that there is a later question about student unions, which cost £23 million. We are looking at the question with an unbiased mind in order to see whether it is feasible to introduce such a system. After all, the Government claim to be radical and to be looking at the whole funding and organisation of higher education. I take my hon. Friend's point. I do not think that the Government are considering in any way a total loan system. It is a question whether in some way there is some means of doing it, particularly bearing in mind that £115 million is being spent on discretionary grants in this country, as people cannot get them these days from many local authorities, and that there is £97 million by way of parental contribution, which is the biggest cause of a generation gap in this country.
§ Mr. Foulkes
Does the Minister agree with the National Union of Students and the Association of University Teachers that any system of loans involves a costly bureaucracy and discourages working class children from going to college? Will be stop wasting Government time and money in looking at a loans scheme, stop causing alarm and despondency among intending students, and rule it out now, once and for all?
§ Dr. Boyson
That was a very robust contribution. There is already a bureaucracy to sort out the grants and the parental contribution. It is not done from outer space. Staff are already employed by local authorities for the purpose.
Since, over the last four years, the percentage of children of working class parents, as a percentage of the intake to university, has dropped by 4 per cent., nobody can say that the present system is encouraging working class children to go to university.
§ Mr. Rhodes James
Does my hon. Friend agree that there is all the difference in the world between a possible loan scheme for first degree students and a loan scheme for post graduates? When he is considering the matter, will be recognise that many of us would be profoundly unhappy about any loan scheme for first degree students.
§ Dr. Boyson
I take the point raised by my hon. Friend the Member for Cambridge (Mr. Rhodes James). We are also looking at the postgraduate aspect. As I have already said, if we decide at the end of this year that it is a feasible and desirable method, we shall conduct wide consultations, and I am sure that my hon. Friend will be heavily involved within them.
§ Mr. Christopher Price
Is the Minister aware that he did not sound terribly unbiased when he was answering the question of the hon. Member for Macclesfield (Mr. Winterton)? [Interruption.] It is nice to know that he has become unbiased. Will the Minister assure the House that he will take into consideration the very lukewarm paragraph that the Select Committee produced on loans, and also the fact that all the Conservative Members on the Select Committee, whatever views they might have had at the beginning of our considerations, had no massive enthusiasm for loans by the end of them?
§ Mr. Boyson
The hon. Gentleman knows me well enough to know that I am unbiased. Years ago, at the time of the Black Paper movement, we carried one another's books around the country. If advice is sought, not only from the report of the Select Committee but from its members, I am sure that those of my hon. Friends who were members of that Committee will give it. I shall go to Sweden next week to look at the situation there in a completely unbiased way.
§ Mr. Brinton
Will my hon. Friend confirm that he is aware of the paragraph that has been quoted from the Select Committee's recent report? I should not describe it as "lukewarm". Does he recall that it requests that urgent consideration be given to the possibility of student loans? Despite the remarks of the hon. Member for Lewisham, West (Mr. Price), was it not the unanimous view of all parties that the Government should investigate that possibility? In addition, will the Government give particular consideration to using the clearing banks for student loans?
§ Mr. Alton
When the Minister considers this subject, will be bear in mind that every student repays his or her grant through the income tax system? Will be also bear in mind that when many graduates finish their courses at universities and polytechnics they are unable to get a job? How can they be expected to repay student loans or grants from their dole money?
§ Dr. Boyson
I doubt whether every student who has undertaken a long course of higher education will fully repay his grant through the tax system. However, I shall leave that to others to look at. Unlike the American system of repayment, most European systems of repayment have clauses that state that people need not repay their grants until they are earning 50 per cent. more than the average wage. That meets the hon. Gentleman's point.
§ Mr. Parris
Does my hon. Friend agree that a good way of experimenting with the introduction of a loan scheme might be to offer loans to those who are not eligible, as of right, for grants?
§ Dr. Boyson
That is an excellent suggestion. My hon. Friend has studied this subject with great interest.
309 Institutions such as Cranfield make great use of a loan system, not only for British students but for students from all over the world.