Recommendations: 5 (part), 77, 70, 76 (part), 78, 80, 82, 83

Recommendation 5 (part): We recommend to the Government that: it considers the possibility of restoring to full-time students some entitlement to social security benefits, as part of its forthcoming review of the social security system. This review should include consideration of two particular groups in current difficulty, those who temporarily withdraw from higher education due to illness and those with dependent children aged over 16.

10.10 Together with DSS, the DfEE will be considering the position of full-time students who have to take time away from their course because of illness. The position of those with dependent children over the age of 16 will be considered as part of DSS’ wider review of social security benefits. 10.11 The response to the other part of this recommendation on the doubling of access funds is set out in Chapter 1, para 1.6 above.

Recommendation 77: We recommend to the Government that, once the interim bursary scheme expires, it establishes permanent arrangements for the equitable support of students of dance, drama and stage management at institutions which are not in receipt of public funds.

10.12 The Government and the Higher Education Funding Council for England are currently in discussion with the relevant bodies on the development of permanent arrangements for the support of students of dance, drama and stage management at institutions which are not in receipt of public funds, once the interim funding scheme expires.

Recommendation 70: We recommend to the Government that it reviews annually the total level of support for student living costs taking into account the movement of both prices and earnings.

10.13 The Government will monitor student finances regularly through surveys and review annually the level of public support for student living costs. The grant and loan rates for 1998/99 have been increased by 3%, which is above the underlying rate of inflation. A new hardship facility has been created for students who face difficulty.

Recommendation 76 (part): We recommend to the Government that: from 1998/99 it should enable institutions to waive tuition fees for part-time students in receipt of Jobseeker’s Allowance or certain family benefits; as part of its forthcoming review of the social security system, it should review the interaction between entitlement to benefits and part-time study, with a view to ensuring that there are no financial disincentives to part-time study by the unemployed or those on low incomes.

10.14 Funding is being made available to the Higher Education Funding Councils for 1998-99 (£2m in England and comparable sums in Scotland, Wales and Northern Ireland) to enable universities and colleges to remit tuition fees for part-time students who lose their job after their course has started. 10.15 The Jobseeker’s Allowance rules on study by the unemployed will be reviewed in the light of the Workskill Pilots and of early experience of the New Deal. The position of those on low incomes will be considered as part of DSS’ wider review of social security benefits. 10.16 The response to the last part of this recommendation on extending eligibility for Access Fund payments to part-time students is set out in Chapter 1, para 1.6.

Recommendation 78: We recommend to the Government that it introduces, by 1998/99, income contingent terms for the payment of any contribution towards living costs or tuition costs sought from graduates in work..

10.17 In announcing proposals for reforming student support in July 1997, the Government accepted in principle that repayment of contributions towards living costs would be on an income-contingent basis. However, contributions to tuition costs, assessed in relation to the student’s own income and the parental or spouse’s income, would be paid up-front. The Government subsequently announced in November 1997 that repayments of contributions to living costs would be collected through the Inland Revenue. This will ensure that there is a genuinely income-contingent scheme. Graduates will begin repaying once their annual income reaches £10,000 and repayments will be linked directly to income on a month-by-month basis thereafter. Repayments will be suspended if annual income falls below £10,000 at any time.

Recommendation 80: We recommend to the Government that it looks urgently at alternative and internationally accepted approaches to national accounting which do not treat the repayable part of loans in the same way as grants to students.

10.18 The treatment of student loans for public expenditure purposes is being looked at by HM Treasury in the context of the Comprehensive Spending Review.

Recommendation 82: We recommend to the Government that the Inland Revenue should be used as the principal route for the collection of income contingent contributions from graduates in work, on behalf of the Student Loans Company.

10.19 The Government’s acceptance of this recommendation that collection of loan repayments should be through the Inland Revenue was announced in November 1997. The necessary legal provisions are in the Teaching and Higher Education Bill currently before Parliament. Collection of loan repayments through the Inland Revenue offers graduates the simplest and most efficient system of collection while reducing the risk of defaults. In practical terms it enables the new scheme to be genuinely income-contingent and thus fair. Details of how the scheme is to operate are being worked out with the Inland Revenue and will be made known at the earliest opportunity.

Recommendation 83: We recommend to the Government that it establishes, as soon as possible, a unified Student Support Agency with responsibility for: assessing the eligibility of individuals for various kinds of public support; administering graduate contributions on an income contingent basis; means testing and paying grants for students’ living costs.

10.20 The Government announced in January 1998 its intention to look in more detail at options for administering the student support system including the option of a Single Student Support Agency for England and Wales. (A single Agency already exists in Scotland.) As the Dearing Committee quite rightly recognised, the priority in the next couple of years must be to bed down the new arrangements for income-contingent graduate contributions. A review of options will be completed in 2000. In the meantime a new system of rigorous performance standards will be agreed with Local Education Authorities to ensure the effective delivery of the service. LEAs and the Student Loans Company will therefore have key roles to play for at least the whole of this Parliament.

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