In his written statement on 7 February 2008, Official Report, columns 85-86WS, on the Education (Student Support) Regulations, the Secretary of State announced that he was amending the student support regulations to disallow prisoners who were also full-time students from receiving financial support for maintenance, thereby removing the long-standing provision which had allowed prisoners to claim such support. In a further written statement on 25 March 208, Official Report, column 6WS, he announced that an investigation showed that 154 individual prisoners had received some form of maintenance payment while a full time student since 1998. In total, prisoners received £570,000 in maintenance loans and £160,000 in maintenance grants over that period. The investigation also showed that assessments for student support were carried out in accordance with the rules that applied at the time. There was also evidence of some maintenance payments made to prisoners between 1990 and 1998.
The following table shows the amounts in maintenance loans and maintenance grants paid to prisoners undertaking full-time higher education courses in each of the last 10 years for which figures are available.
Academic year 1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Student Loans1 12,675 19,912 13,602 19,879 39,860 41,587 60,285 105,437 143,564 108,670 Maintenance Grants2 0 0 0 0 0 0 9,189 24,999 68,704 54,816 Total 12,675 19,912 13,602 19,879 39,860 41,687 69,474 130,436 212,268 163,486 1 Student Loans consist of pre-1998 mortgage-style loans; income contingent loans introduced in 1998 and transitional loans (1998/99). 2 Maintenance grants consist of the former Higher Education grant in 2004/05 and 2005/06 and maintenance grant from 2006/07.
Repayment of student loans by prisoners is the same as for other borrowers. For income contingent loans, borrowers start to repay in the April after they graduate or withdraw from their course. Repayment is linked to income and repayable through the PAYE or Self Assessment Tax system and is at 9 per cent. on earnings above £15,000 a year. Interest paid is linked to the rate of inflation, so in real terms what is paid back is equivalent to what was borrowed. The repayments to the Student Loans Company by these borrowers and posted to their accounts as at 19 March, 2008 is shown in the table as follows.
Loan type Amount repaid (£) Mortgage Style loans 3,566 Income Contingent Repayments (covers repayments to end March 2007). 22,091 Total repaid 25,657
The figures do not include payments that have been made but not yet credited to Borrowers’ accounts. Prisoners will typically take longer to start repayments than other students. For example, some prisoners will complete their course several years before release; and there will therefore be a longer period between prisoners finishing their studies and starting work and earning above the annual threshold.