§ Mr. Anthony Coombs
To ask the Secretary of State for Education and Science what is the basis for calculating the unit cost per borrower's account of administering the student loans scheme; and if he will make a statement.
§ Mr. Alan Howarth
The unit cost per account for the academic year 1990–91 will be the operational costs of the Student Loans Company, excluding VAT, during that year, divided by the number of accounts open during the year. The unit cost per account has already fallen substantially during the first months of the scheme. It will continue to fall over the next few years.
The calculation excludes the start-up costs of £9.3 million, excluding VAT, incurred up to 31 August 1990. This one-off expenditure has enabled the company to administer the loans scheme efficiently. It therefore represents an investment in the future of both the company and the loans scheme.
The student loans scheme has made additional resources available to students in higher education. The number of applications passed the 100,000 mark last month. Thousands more students are applying every week. The scheme will generate substantial savings for the taxpayer in the medium term—and facilitate the expansion of higher education that we all want to see—even when the costs of administering the scheme are included. I congratulate the Student Loans Company on its achievement so far.