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Graduate Debt

Volume 460: debated on Thursday 24 May 2007

2. What the most recent figure is for the average level of graduate debt on leaving university. (138953)

For students graduating in 2005, the average post-graduate repayment is estimated to be just under £8,000. Under the new system of student support introduced this year there are no up-front fees, and loans are repaid only when the graduate is in employment and earning at least £15,000 a year. We have restored non-repayable grants and introduced new bursaries paid by universities. Under that fairer and more progressive system of student financial support, applications for next year are up by 6 per cent.

Last summer, the Secretary of State told the Education and Skills Committee that the 2009 review of the tuition fees policy

“could lead to us abandoning this policy altogether.”

Can the Minister confirm that the impact of graduate debt will be a major factor in the review? If it is found to be damaging, might the Department reject the policy altogether?

My right hon. Friend the Secretary of State has made it clear that it is essential that we undertake the review. Our position on the issue has been consistent from the beginning and we will not pre-empt that review. We have to see the first full three years of operation. However, we need some consistency on the issue from all politicians from all political parties. The Liberal Democrats in government in Scotland have been supporting a system of postgraduate repayment that is no different in principle whatever from the system that we have in England.

Given the high level of student debt and the stiff competition for graduate jobs, what are the Government doing to promote and encourage modern apprenticeships as an alternative career path for young people?

The Government have tripled apprenticeships in the past 10 years, in stark contrast to the position in the 1980s and early 1990s, when apprenticeships almost disappeared. We are talking up apprenticeships and increasing the numbers, not talking them down, as Opposition Front Benchers consistently do.

The university admissions body, speaking of debt, reports a large increase in suspected student loan fraud. There were 1,500 cases in 2006 and a BBC investigation uncovered fraud involving 200 stolen birth certificates, resulting in the loss of an estimated £1.2 million. The Minister knows that he has failed to respond to my call for a full investigation. I know that he is busy and that he has an excuse—he is calculating the deadweight cost of the train-to-gain scheme; working out how many apprenticeships do not have any workplace element, and making up excuses in case diplomas go horribly wrong. However, it should not be up to the media to investigate such systematic criminal activity. Will he bring to the House details of his internal inquiry, for there must have been one? How much does he expect fraud to be reduced as a result of tighter new rules? I cannot keep making excuses for him.

We have undertaken an internal inquiry. The estimate is that the level of fraud is 0.6 per cent. of the total. That level is unacceptable, but it is significantly better than in other areas of the benefit system. We have also tightened up the system. If the hon. Gentleman wants to give the impression that he is opposed to the current system of student financing and the system of postgraduate repayment, he may want to talk to his colleague, the hon. Member for Henley (Mr. Johnson), who said recently:

“We have junked the old Tory opposition to the variable fee. We have jettisoned our sour mealy mouthed and intellectually incoherent programme for government.”

I do not think that that message has quite been translated across the Opposition Front Bench yet.