HC Deb 17 November 1992 vol 214 cc126-7
3. Mr. Pike

To ask the Secretary of State for Education what information he has regarding the take-up rate of student loans in the current university year.

The Parliamentary Under-Secretary of State for Education (Mr. Nigel Forman)

As at 13 November, 115,770 students had applied for a loan for the current academic year.

Mr. Pike

Does the Minister accept that all independent advice shows that there is a high level of overdrafts and bank loans, in addition to student loans, and real hardship in the student population? Will the Government admit that they have got it wrong on student loans, scrap them and go back to a proper system of grants?

Mr. Forman

The Government have no intention of scrapping student loans. They are a useful additional facility for students. There can be no generalised hardship because in the past four years for which we have figures —including the last academic year—fewer than two fifths of all students took up student loans.

Mr. Pawsey

Does my hon. Friend agree that if student loans were as unpopular as the hon. Member for Burnley (Mr. Pike) implies, there would be fewer students in advanced education? Will my hon. Friend confirm that the number of students has increased from fewer than 700,000 to substantially more than 1 million and that the figures show that where previously one in eight people in the target group went into advanced education, now one in four does so?

Mr. Forman

My hon. Friend is right. During the period that student loans have been available, student participation in higher education has increased by one fifth. It is still rising and is due to rise by a further 13 per cent. in the next three years.

Mr. Steinberg

Is the Minister aware that student loans have not been taken up because many students are not prepared to put themselves into further debt? Is he further aware that a master at one of the colleges in my constituency told me that he had overhead a conversation between students with rich parents saying that they intended to use a student loan to go on a skiing holiday?

Mr. Forman

It is always unwise to rely on hearsay and overheard conversations. The conditions and terms of student loans through the Student Loans Company are the best deal in town and the most attractive form of finance available to students who wish to take out a loan.

Mr. Batiste

Is my hon. Friend aware that many students have taken out loans when they would not otherwise have wished to do so because a handful of local authorities, mostly Labour controlled, have been appallingly late in delivering their grants to them? Will he monitor the position carefully this year and ensure that there is no repetition of that problem?

Mr. Forman

Indeed, we pay very close attention to such matters. It is regrettable that many local authorities, especially Labour-controlled authorities, are slow in dealing with mandatory awards. We monitor the position carefully and we shall take swift action to deal with any abuses which arise.

Mr. Rooker

Does the Minister accept that for well-off students and families a student loan is a damned sight cheaper than using a credit card for a holiday and that that is an abuse of the system? Will he confirm that the Student Loans Company is seeking the services of debt collection agencies but so far has been unable to find anyone to do the work? Will he assure the House that if debt collection agencies are employed it will be done by competitive tendering and that in the interests of open government a list of agencies prepared to carry out such work will be placed in Hansard?

Mr. Forman

I have every confidence in Mr. Young and his team at the Student Loans Company. Their record has been very good. Their administrative costs are low and their record on getting payments in is extremely good.

Dame Elaine Kellett-Bowman

Does my hon. Friend accept that those loans are much appreciated by the students of Lancaster university, 825 of whom have taken them up? Moreover, 10 people apply to Lancaster university for every place that is vacant. Could that be because of the wide range of imaginative research carried out there, the latest of which is on how to adapt military technology to civilian purposes in Russia—a project known as "swords into ploughshares"?

Mr. Forman

I pay tribute to my hon. Friend for her sterling support of the university of Lancaster. I have visited that university, the records of which show how excellent it is.