HC Deb 30 November 1993 vol 233 cc482-3W
Mr. Clappison

To ask the Secretary of State for Education if he will give details of the support that will be given to students through mandatory awards and loans in the academic year 1994–95.

Mr. Patten

I have laid before Parliament today the Education (Mandatory Awards) (No. 2) Regulations 1993 and, together with my right hon. Friend the Secretary of State for Scotland, the Education (Student Loans) (No. 2) Regulations 1993. The regulations include the new rates of grant and loan for the academic year 1994–95.

The rates of loan available to students in 1994–95 will be 44 per cent. higher on average than in 1993–94. Taken together with the reduction in grant which I announced separately today, that will provide for a total level of support available through the main rates of grant and loan together which will be 4 per cent. higher than this year, thus maintaining its value in real terms.

The main rates of grant and loan set out in the regulations are as follows:

£ Grant Loan (full year) Total
Students living away from parents' home:
In London 2,560 1,375 3,935
Elsewhere 2,040 1,150 3,190
Students living at parents' home 1,615 915 2,530

Note.—The loan rates shown here apply to students throughout the United Kingdom. The grant rates apply to students from England and Wales. The equivalent arrangements for Scotland and Northern Ireland are being announced separately.

In addition, the parental and spouse's contribution scales are adjusted so that the contribution from a parent or a spouse whose residual income rises in line with average earnings will continue to fall in real terms. The supplementary allowances payable as part of the mandatory award are increased by 4 per cent. Loan rates for final year students are increased in proportion to the full-year rates of loan.

The number of students in higher education is now higher than ever before: the participation rate of young people has more than doubled in the past five years. Against that background, the Government believe in principle that graduates—as the main beneficiaries of higher education —should contribute a higher share of its costs. But no student will need to begin paying back their loan until after they have left their course and their income is higher than 85 per cent. of national average earnings—that is nearly £14,000 in today's prices. The Government will continue to keep the level of repayments under review.