§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science (1) what scope remains for students to negotiate alternative contact names; and if he will make a statement;
(2) what were the reasons for the decision that applicants for student loans must now provide contact names of blood relatives.
§ Mr. Alan HowarthThe administration of the student loans scheme is the responsibility of the Student Loans Company. I am therefore asking the managing director of the company to write direct to the hon. Member with the information requested.
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science if he will provide the reference for the regulation allowing the Student Loan Company to require applicants to have a bank account capable of direct debit; and if he will make a statement.
§ Mr. Alan HowarthThe Education (Student Loans) Act 1990 does not require the arrangements for administering the student loans scheme to be contained in regulations.
The Act does, however, require regulations to provide, among other things, for the manner in which repayments of loans are to be made. Regulation 7(4) of the Education (Student Loans) Regulations 1990 therefore provides that repayments shall be made by direct debit from the borrower's bank or building society account unless the loans administrator agrees otherwise. Under current arrangements the loans administrator is the Student Loans Company.
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science what hardship provisions graduates with student loans may seek if supporting dependants, high rent, or mortgages renders them unable to make payment; and whether he will make a statement.
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§ Mr. Alan HowarthBorrowers under the student loans scheme whose repayment term has begun may defer making repayments where their gross income is less than 85 per cent. of national average earnings. Repayments of about £400 a year in 1990 prices should be manageable for borrowers whose income exceeds that threshold.
The Education (Student Loans) Regulations 1990 make further provision for borrowers who receive certain disability-related social security benefits. Those benefits are disregarded when assessing borrowers' income for deferment purposes. The Student Loans Company may also permit such borrowers to commence repayment at a later date than they would otherwise have to or to repay over a longer period.
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science whether he will propose some remedy for applicants for student loans whose birth certificates have been refused by higher education institutions as adequate identification where their name has since changed; and if he will make a statement.
§ Mr. Alan HowarthRegulation 11(4) of the Education (Student Loans) Regulations 1990 requires institutions to inspect the birth or adoption certificate of a student who seeks certification of eligibility for a loan, where that student was born in the United Kingdom. The Student Loans Company uses information contained on such certificates to identify each student individually. This helps to avoid confusion and to prevent fraud. It thereby protects both the taxpayer and the student.
Because the information on a birth or adoption certificate does not change, it is particularly valuable where the student's name has changed since birth or adoption. In such cases, the student may also need to produce documentation showing that he or she is the person named on the birth or adoption certificate.
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science what representations the Student Loan Company has made to him regarding its delay in processing student loan applications; and whether he will make a statement on the rate of take-up of loans.
§ Mr. Alan HowarthAs at Thursday 14 February, more than 98,000 applications had been made to the Student Loans Company.
The company aims to process loan applications within 21 days of receipt. In setting itself this aim, the company relies on students' institutions to forward eligibility certificates promptly and correctly completed. It also relies on students to complete their application form correctly and then to sign and return their loan agreement form promptly. Where these conditions are met, the company is achieving its aim.
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science what costs the Student Loans Company has incurred to date, separating out start-up costs and continuing operations; and whether he will make a statement.
§ Mr. Alan HowarthThe total costs of establishing the student loans scheme to 31 August 1990 were £9.3 million, exclusive of VAT. This figure includes costs incurred before the Student Loans Company was founded. Between 1 September 1990 and 31 January 1991 the company incurred operational costs of £4.64 million, excluding VAT.
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§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science if he intends to continue his policy restricting students in higher education to one application per academic year to the Student Loans Company; and if he will make a statement.
§ Mr. Alan HowarthYes. Depending on the time in the year when students apply, they may ask the Student Loans Company to pay their loan in up to three instalments.