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Students: Finance

Volume 461: debated on Monday 4 June 2007

To ask the Secretary of State for Education and Skills what the expected cost is of fee (a) loans and (b) grants for full-time students on undergraduate degrees linked to Higher Education Funding Council for England and Training and Development Agency-funded provision for EU students studying in English institutions in 2007-08; what the planned cash cost is of maintenance income contingent loans for full-time higher education students in England in 2007-08 and for EU students studying in English institutions; and what the planned cash cost is of grants for (i) full-time and (ii) part-time undergraduate students from EU member states studying in English institutions in England in 2007-08. (137579)

We expect the cost of full-time EU students studying in English HE Institutions in 2007-08 to be as shown in the following table.

Amount (£ million)

Fee Loans

Cash outlay

170

Resource cost2

1120

Fee Grants

110

Maintenance Loans

Cash outlay

120

Resource cost3

<5

Other Grants

<5

1 Rounded to the nearest £10 million. 2 The resource cost of providing fee loans is based on a RAB charge of 33 per cent. which reflects the true cost of loans to the Government over the lifetime of the loan. 3 The resource cost of providing maintenance loans is based on a RAB charge of 21 per cent. which reflects the true cost of loans to the Government over the lifetime of the loan.

Part-time EU students studying in English HE institutions are expected to cost around £1 million in grants. The estimated cost of loans and grants for EU students represents about 2 per cent. of the total resource cost to the Government of student support provision of approx £1.9 billion. Under the terms of the EC treaty, UK students may attend universities in other European States and benefit from whatever fee support that country offers.

EU loan repayments will be collected by the Student Loans Company (SLC), which already has experience of recovering loans from UK borrowers who go overseas and from EEA migrant workers who are entitled to loans. All borrowers from September 2006 enter a contract with the SLC enforceable in UK law which, under EC regulation 44/2001, can be enforced by courts in other EU countries.