§ Earl Russellasked 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.12WA 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.