HC Deb 05 February 2004 vol 417 cc1032-3W
Mr. Rendel

To ask the Secretary of State for Education and Skills pursuant to his reply of 22 January 2004,Official Report, columns 1405–07W, what the assumed distribution was in the model of the (a) size of means-tested loan taken out and (b) size of fee loan, net of any fee remission. [151860]

Alan Johnson

[holding answer 29 January 2004]: In estimating the 13 years figure as the average time for loan repayment—22 January 2004, Official Report, columns 1405–07W—the modelling was undertaken across all students rather than being a figure for an 'average student'. The estimate is based on the whole distribution of borrowers rather than on an 'average student' or a student with average debt—there is therefore no one level of debt on which the estimate is based. Factors that were taken into account in developing the model include:

  1. (i) The future pattern of demand for Higher Education by parental income;
  2. (ii) The proportion of students studying in London, at home or elsewhere;
  3. (iii) The propensity of students to take out loans;
  4. (iv) The distribution of fees actually charged by Higher Education institutions from 2006/07;
  5. (v) The distribution of lengths of courses (based on internal modelling); and
  6. (vi) The pattern of withdrawals from HE courses (based on internal modelling).

The model was applied on the basis of a separate fee grant and HE grant as set out as follows. Once the grants are combined, as announced by the Secretary of State to the House on 27 January 2004, the balance between maintenance loan and fee loan will be slightly different, though the overall impact is likely to be small.

  1. (a) We currently expect that in 2006/07 around 50 per cent. to 55 per cent. of students will be eligible for the full value of the means-tested maintenance loan of—on average—around £4,000. The remaining students are expected to be eligible for at least the non means-tested element of the loan—an average of around £3,000.
  2. (b) For fee loans, our estimates have been prepared using an assumption that 75 per cent. of students could be charged £3,000 and 25 per cent. of students £1,200 (an average fee of £2,550). We expect around 50 per cent. to 55 per cent. of students will receive some fee remission. Under these assumptions, the 40 per cent. to 45 per cent. of students who receive no fee support would be eligible for an average fee loan of £2,550.

As noted above, this is on the basis of a separate fee grant and HE grant. Under the combined grant scheme, we expect that 50 per cent. to 55 per cent. of students would receive all or part of the HE grant of £2,700.

We then assume that 85 per cent. of students will take up maintenance loans and 80 per cent. of students take up fee loans. Loan take-up is assumed to be independent of parental income.

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