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Student Finance

Volume 450: debated on Wednesday 25 October 2006

To ask the Secretary of State for Education and Skills what the cost was to his Department of subsidising the interest rate on accumulated student debt for 2005-06; and what the Department's estimate is of any change in this annual cost as a result of the Higher Education Act 2004 and the deferral of variable tuition fees. (96828)

[holding answer 24 October 2006]: The cost of subsidising the annual rate of interest on the stock of English and Welsh maintenance loans was £355 million in financial year 2005-06. This is the amount released from the interest subsidy provision as stated in the FY 05-06 departmental resource accounts. The calculation of annual cost is based on a number of variable factors, including the closing and average values of the loan stock, the cost of capital and interest added to the loans each year.

Future cost estimates are calculated on a long-term basis over the lifetime of loans as part of the resource accounting and budgeting (RAB) charges, which take into account both interest subsidy and write offs. There are separate RAB charges for maintenance and fee loans. My written statement of 10 November 2005 provides future estimates of maintenance and fee loan RAB charge costs for accounting year 2006-07.

To ask the Secretary of State for Education and Skills how many students qualified for the full maintenance grant of £2,700 introduced in September. (96829)

[holding answer 24 October 2006]: The new maintenance grant and the equivalent special support grant were introduced for new full-time English domiciled students who started their course in September 2006 or later. The grant is means-tested and my Department anticipates that around 30 per cent. of new full-time English domiciled students in 2006/07 will receive the full grant, while around 50 per cent. will receive either a full or partial grant.

Figures on the distribution of the new maintenance grant will be published for the first time in the National Statistics Statistical First Release “Student Support for Higher Education in England, academic year 2006/07 (Provisional)” in November 2006.