Student Loans (Hansard, 17 December 1997)

§ The Minister of State, Department for Education and Employment (Baroness Blackstone)
My Lords, student loans are intended to help students meet their living costs, and not their tuition fees. In 1998–99 eligible students will be able to apply for loans from the first day they attend their course. The Student Loans Company pays over 99 per cent. of loans within 21 days of receiving an application form.
The amount which students and their families are expected to contribute towards tuition fees will be income-related. Where the assessed contribution is less than £1,000 the balance will be paid direct to the student's university or college by his or her local education authority.
Where the local authority is not meeting the full fee, the student or his or her parents or spouse will be expected to meet the balance. Additional loans for living costs are being provided so that the total contribution expected towards fees and living costs will not be any higher in real terms than the current contribution towards living costs. We have asked universities and colleges to be sensitive in collecting fees—for example, by allowing students to pay in instalments.

§ Lord Tope
My Lords, I am grateful to the Minister for that Answer. I am of course aware of the purpose of student loans. Is the Minister aware that there is widespread anxiety among many students that they will need a loan in order to pay the tuition fees, either because of some parental inability or unwillingness to do so or some other delay? What steps will the 618 Minister's department be able to take to reassure students who are anxious about the position they will face next autumn?

§ Baroness Blackstone
My Lords, I am grateful to the noble Lord. We are aware that there is anxiety. However, we feel that it is misplaced, since no parents will have to pay any more in combined maintenance support and tuition fees than they pay at present. We expect those parents who can afford to pay to do so, just as under the existing scheme we expect parents to maintain their children who are at university when they can afford to do so.

§ Lord Taylor of Blackburn
My Lords. what provision is the department making for those students who apply and whose parents refuse to help them?

§ Baroness Blackstone
My Lords, perhaps I may repeat what I have just said. We expect parents who can afford to contribute towards the tuition costs of their children at university to do so, just as at present we expect them to contribute towards maintenance costs. No parents will have to pay any more than they do under the present scheme. We believe that it is right that parents should take their parental responsibilities seriously and support their children in higher education.

Baroness Young
My Lords, is the noble Baroness aware that she has not answered the question put to her by the noble Lord, Lord Taylor? It is a very serious point. Unfortunately, some parents regard an 18 year-old as an adult and are not prepared to pay further contributions towards his or her education. That is not a view that I accept, but it is a fact of life. The noble Baroness has outlined very complicated arrangements. This is a very serious matter for students applying to university; it would be helpful if she would explain in more detail exactly what is to happen.

§ Baroness Blackstone
My Lords, I took some time in my initial response to set out what will happen. I am trying to be as helpful as I can by explaining it in some detail, since I am perfectly aware that the matter is quite complex and there is some misunderstanding. Perhaps I may remind the noble Baroness—I am sure that she will remember this—that, under the Government in which she served as a Minister in the Department of Education and Science, as it then was, she expected parents to contribute to the maintenance of their children at university. We expect exactly the same. If parents refuse to contribute, their children will have to take out a loan through the banks, just as they do at present. The point I am trying to get across is that no parent will have to pay any more than under the existing scheme, so there should not be more parents who are not contributing. I hope that that is helpful.

§ Lord Williams of Elvel
My Lords, in her Answer my noble friend explained that contributions will be 619 income related. Will she explain to the House what assessment will be made of income, and in what sense contributions will be related to that income?

§ Baroness Blackstone
My Lords, exactly the same scheme will be in place for the assessment of income as is currently in place. There will be no changes to that.

§ Lord Pilkington of Oxenford
My Lords, I wish to ask a simple question. Are the Government, and is the Minister, satisfied with a policy which is intended to increase student numbers but which results in falling applications, particularly from poorer families nationwide, to many universities? Is the Minister satisfied that the policy will enable poorer children to go to university without restriction?

§ Baroness Blackstone
Yes, my Lords. There is no evidence that young people from low income homes will not continue to apply for university places. We are making the new tuition fee means-tested; it is income-contingent. So 30 per cent. of young people from lower income homes will not pay the fee and another 30 per cent. will only have to make a contribution towards the fee.
We feel that it is right that we should all ensure that young people from backgrounds where there is no tradition of going to university or where the income is low have the means not to be in any way affected by the tuition fee.

§ Lord Tope
My Lords, the Minister acknowledged that there is widespread anxiety, even though she feels that it is misplaced. I ask her again what steps she or her department intend to take to reassure students, to convince them, their parents and others that the anxiety is misplaced, if it is.

§ Baroness Blackstone
My Lords, we have already issued literally thousands of leaflets which have gone to all potential university students in schools and colleges, all second year A-level students. My right honourable friend the Secretary of State has also sent a letter to all those students explaining the system and, I hope, dealing with misplaced fears about it. We have advertised on radio, but not on television; we have a hotline to the Department for Education and Employment; and we have received over 20,000 telephone calls on that hotline, for which we provided information. In addition, the CVCP and SCOP have provided further advice, as has UCAS.