§ 7. Sue Doughty (Guildford)
If he will make a statement on current and projected levels of student debt. 
§ The Secretary of State for Education and Skills (Mr. Charles Clarke)
The average publicly owned debt of a borrower with a new income-contingent loan, entering repayment in April 2003, is estimated to be £7,240. Information on students' private-sector debt, such as overdrafts and other commercial loans, is not available centrally. The student income and expenditure survey 2002–03 will collect information on younger full-time students' current debt and expected debt on graduation.
Average levels of student debt for future cohorts of leavers will depend on a number of factors, including average course length, the proportion leaving their course early, and the proportion of loan entitlement actually borrowed.
§ Sue Doughty
I thank the Secretary of State for that answer. Is he aware that high levels of debt form a real deterrent to disadvantaged and low-income groups, such as the ethnic minorities, single parents and women? What assessment has been made of the impact of that debt on those groups?
§ Mr. Clarke
I am aware that debt can act as a disincentive in precisely the way that the hon. Lady has suggested. A number of research projects, including some commissioned by my Department, illustrate the points that she makes. However, in connection with the higher education White Paper, it is important to set the debt issue against the fact that we intend to allow students to defer the up-front fee of £1,100, which at present they have to pay. We also intend to raise the repayment threshold to ਓ15,000—to make repayment through the tax system more affordable—to maintain the fee-remission scheme for students, and to reintroduce grants of up to £1,000, so that students from lower—income backgrounds have more money to live on. 420 Also, any debt incurred will of course be based on a zero real rate of interest, not the sort of rate involved in using a Barclaycard, or in a car loan or mortgage.
§ Mr. Harry Barnes (North-East Derbyshire)
Many adults who enter university education have to give up jobs to do so. When they return to the labour market, they may not find jobs that are better paid than what they gave up, but they decide to go to university not to enhance their financial status but because their interests in education change, and they want to move into other things. Will not those people be deterred from making such a decision if they think that they will be left with debts that they might not be able to handle?
§ Mr. Clarke
I accept that mature students enter university and higher education for a variety of motives that are different from those of people who go straight from school. That is one reason why the proposed £1,000 grant will go directly to independent students of the type described by my hon. Friend. It is also important to note that any debt repayment is entirely income contingent, with a £15,000 basic level. If the individuals concerned earn less than that when they go back to work, they have to pay nothing. If they earn, say, £20,000 a year, they will have to pay something of the order of £38 a month. As I said to the hon. Member for Guildford (Sue Doughty), I acknowledge that this is a legitimate issue, but I hope that my hon. Friend will accept that we are trying to take steps to deal with it.
§ Mr. Simon Thomas (Ceredigion)
The Secretary of State has just mentioned the welcome reintroduction, proposed in the White Paper, of maintenance grants worth £1,000. However, the right hon. Gentleman knows that the Welsh National Assembly has already introduced Assembly learning grants of £1,500. What discussions is he having with the National Assembly to secure a transfer of responsibilities and funding in connection with student funding, to ensure that students in Wales are better off as a result of the White Paper, and not worse off?
§ Mr. Clarke
We are discussing, with my right hon. Friend the Secretary of State for Wales, the Wales Office and the Welsh Executive, precisely those questions. However, detailed work is being done to assess the financial implications of the sort of change that the hon. Gentleman suggests. It will be some time before we can come to a firm view on this and make the proper assessment. I can assure the hon. Gentleman that when we have come to that view we will publish the information so that people can see clearly the basis of any judgment that we finally make.
§ Mr. Charles Hendry (Wealden)
Does the Secretary of State accept that the Government are impaled on a hook of their own making on the issue of student debt? Will he now drop his target of 50 percent. going to university—a figure rejected by most institutions, parents and students—which would be responsible for pushing up the cost of higher education by so much? Does he not understand that most young people want to go to university where they meet the academic requirements and do not want to be saddled with massive debts for years afterwards or to have their 421 admissions decided by a regulator who attaches more importance to their parents' income and education than to their own academic achievements?
§ Mr. Clarke
The last point is total nonsense. The hon. Gentleman is wrong to suggest that the proposals to widen access to 50 per cent. of the population are not generally welcomed. They have been widely welcomed both by the higher education sector itself and by all those concerned with the future of the economy. That is for the very good reason that in future the competitiveness of the economy will depend on high-level qualifications, and jobs will be for people with such qualifications, rather than for people who leave school at 16. That is why we focus on that. I know that the Opposition want to shrink university education and go back to the days when between 6 and 8 per cent. of the population went to university, but that simply shows how out of time they are.