2.19 The principle that the costs of learning should be shared applies equally to students and their families. The student support system has, in the past, distributed public help unevenly. People should not be prevented from taking up learning because of personal or family financial hardship, but we also recognise that they also benefit from learning in the form of higher earning potential.

2.20 We are examining ways of providing greater incentives to stay in learning - by better targeting of support - for young people and their families in low income households. This will include those who have just left compulsory education. In further education, learning will remain free for young people up to the age of 18, and for adults who are unemployed, on income support or dependent on those who are. We will look for increasing contributions from employers for courses directly meeting their skill needs.

2.21 In July 1997 we announced new financial support arrangements for full-time undergraduate students. Students will in future be expected to contribute up to £1,000 per year towards the cost of their tuition, depending on their own, their parents' or their spouse's income. Students from poorer families will have their fees paid for them, and an additional loan of at least £1,000 for maintenance will be available to students and their families so that no parental contribution need be greater than it is at the moment. The new arrangements are fairer and will help to ensure that all students have access to financial support when they need it most. No-one will be prevented from entering higher education because of their financial circumstances.

2.22 Student loans are currently not available to people who are over the age of 50 at the start of their course. We do not think it would be appropriate to make income-contingent loans available to students who do not plan to re-enter the labour market following their studies and so would not be in a position to repay. However, we are minded to extend loans to people in their early 50s wishing to undertake a course of higher education; for example, to help them retrain following redundancy. We would welcome views on the priority which should be given to such an extension.

2.23 Graduates will not start to repay their loans until their income is £10,000 a year, and repayment, through the Inland Revenue, will be entirely linked to income. For many graduates this will mean smaller monthly repayments over a longer period than under the current loans scheme. In the few cases where loans have not been paid off by the age of 65, they will be cancelled so long as the borrower is not in default. We propose to make the administration of student support more efficient so that students receive their loans by the start of term.

2.24 Financial support can also make the difference for many people seeking to return to learning in further and higher education. Access funds help students in financial difficulties to meet the costs of accommodation, childcare, transport, books and equipment, or other costs. We propose to increase the size of access funds in further education and to consider whether to distribute them differently. In higher education, we have already announced a £36 million access package which will benefit part-time students and those facing particular hardship. This will allow us to:

• double the amount in access funds for students facing hardship and extend eligibility to part-timers;

• abolish the means test currently applied to special grants for disabled full-time students;

• introduce an additional £250 loan on a discretionary basis for students who find themselves in financial difficulties: and

• pay the fees of part-time students who lose their job after starting their course.

2.25 In adult, further and higher education we propose to change the current system for discretionary awards provided by local education authorities. It is inequitable that the chances of getting an award depend on where you live. We have asked a group of local authority, further education, and other representatives to advise on a more effective way of targeting the resources available on those students most in need. In addition to these new arrangements - on which we will consult - local education authorities will continue to be able to make their own discretionary awards if they wish to.

2.26 Career Development Loans (CDLs) help people to pay for vocational education or training by offering a deferred repayment bank loan. They are available through a partnership between the Government and four major banks. From this April we will change the terms to enable a longer interest holiday - for people who are unemployed, or working but in receipt of in-work benefits - after their period of learning. In due course, we will consult the banks on Career Development Loans becoming part of the individual learning account system.