HL Deb 17 July 1991 vol 531 cc11-2WA
Earl Russell

asked Her Majesty's Government:

(a) What has been the take-up rate of student loans in the first year of the scheme; (b) what has been the cost to public funds, including the administration of the Student Loans Company; (c) what would have been the cost of giving the same amount of money to students in the form of grants; and (d) what is the net effect of the scheme on the Public Sector Borrowing Requirement.

The Minister of State, Department of the Environment (Baroness Blatch)

As at 10th July, the Student Loans Company had paid loans worth £64.4 million to a total of 166,356 students, some 26 per cent. of the estimated number of eligible students. Students may take out a loan in respect of the academic year 1990–91 by returning a signed loan agreement to the Company by 31st July 1991.

Between September 1990 and June 1991 inclusive, the operating costs of the Student Loans Company were £8.3 million, excluding VAT. The sum of the loans received by students up to 10th July and of the Company's operating costs to 30th June is therefore £72.7 million.

The cost of giving £72.7 million to students in the form of grant would have been that £72.7 million, plus any costs of administration. As loans are repayable, giving the money in the form of grant would have resulted in a net long-term addition to public expenditure of over £52 million.

To calculate the PSBR effect of the new support arrangements—using the same methodology as in Annex E of the White Paper Top-up Loans for Students (Cm 520)—will not be possible until the end of the academic year.