Student Finance (Hansard, 21 June 1988)

§ 1. Mr. Buckley
To ask the Secretary of State for Education and Science when he now expects to publish his report on student finance; and if he will make a statement.

§ The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson)
The student support review has not yet completed its work. The Government's proposals for the future of student support will be published in due course.

§ Mr. Buckley
As women are generally lower paid than men, what steps will the Under-Secretary take to ensure that there is no discrimination against female students applying for loans under the Government's proposals?

§ Mr. Jackson
The Government have not yet announced any proposals, so it is hard for me to comment. There has been a great deal of rather imaginative speculation in the press. We are determined that there will be no discrimination in the system of student support and that that system will promote access to higher education for everyone who is qualified for it.

§ Dame Elaine Kellett-Bowman
Does my hon. Friend accept that I attach great importance to student loans? Is he aware that the majority of cases of hardship that come to me are caused by parents who do not meet their parental responsibilities? Therefore, if students had access to loans, they would be infinitely better off. Will my hon. Friend ensure that the repayment terms are such that the system does not turn into a reverse dowry against girls and does not disadvantage those on long courses?

§ Mr. Jackson
I have noted my hon. Friend's suggestions, but many countries have a student loan system that does not operate to the disadvantage of women. In fact, it secures greater access to higher education than does our system of grants. Only 8 per cent. of our entrants to universities come from social classes 4 and 5, which is a lower percentage than that in countries that operate student loan schemes.

§ Mr. James Lamond
Has the Minister considered the American experience of student loans? Is he aware that defaults on loans are running high—at least 20 per cent. or, perhaps, higher? The American Education Secretary, William J. Bennett, said that the defaults are now out of control. Despite trying a number of methods to recover the loans, the Americans are now talking about withholding student loan grants from institutes that cannot reduce defaults to below 20 per cent. Is that the sort of future that the Minister envisages for education

§ Mr. Jackson
I have already said that we are considering international experience. The United Kingdom is virtually the only country that does not have a loan element. We shall learn from the mistakes of other countries. Some of them—for example, Sweden—have a low default rate, so the evidence is not as conclusive as the hon. Gentleman suggested.

§ Mr. Forth
Does my hon. Friend agree that adults who have the vote should be fully prepared to take responsibility for financing their further education? Does he also agree that those who take loans would render themselves independent as adults, from both their parents and the Government?

§ Mr. Jackson
We have carried out a survey of student income and expenditure, which has shown that many parents do not pay the full parental contribution. About 40 per cent. fail to do so. There is no doubt that the provision of additional resources to students would help them to secure the greater independence to which my hon. Friend referred.

§ Mr. Andrew F. Bennett
Will the Minister look carefully at the American experience, particularly the indictment of the loan system in the New York Times on 8 June, which pointed out that 25 per cent. of students were now defaulting in the United States, it was costing about ․2 billion from federal funds to meet the defaults, there was pressure for checking on the credit rating of students to stop defaults, and perhaps the most damning of all, over a 10-year period, from one in three students having to depend on loans rather than grants, three in four students were having to depend on loans? Surely we should not follow the United States and make the same mistake of bringing in a loan system that will be unfortunate for students and for national finance.

§ Mr. Jackson
We can learn a great deal from studying the experience of other countries, which have variegated systems of student support. The American experience in respect of defaults on loan payments is anomalous compared with the experience of other countries that have loan systems.