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Postgraduate Education: Finance

Volume 487: debated on Monday 9 February 2009

To ask the Secretary of State for Innovation, Universities and Skills (1) what assessment the Government (a) has made and (b) plans to make of the effects of (i) the recession and (ii) restricted availability of credit on the number of UK students wishing to study at postgraduate level; (254953)

(2) what steps the Government plans to take to maintain numbers of students wishing to study at postgraduate level in the current economic climate;

(3) what assessment he has made of the effect on postgraduate students of private finance providers being (a) unwilling and (b) not required to make binding funding commitments for the duration of courses in the current economic situation;

(4) what steps his Department takes to assist postgraduate students not eligible for career development loans whose financial support is withdrawn part-way through their course;

(5) what recent assessment he has made of the effect of the economic downturn on levels of financial assistance for postgraduate students from (a) employers, (b) private companies providing loans and (c) banks.

The Government are determined to ensure that finance is no barrier to going to university. Having a degree remains one of the best pathways to a rewarding career: employers prize the highly-developed skills and talents that graduates bring to their businesses. Going to university is an investment for the future, with graduates benefiting over their lifetime from their decision to go into higher education. The Government’s priority is to assist students to achieve a first degree. That is why statutory student support is concentrated on undergraduates.

No matter what the short-term outlook for the economy, it is sensible for individuals to look at how they can fulfil their potential—and for many that means postgraduate study. The number studying at postgraduate level have increased by 27 per cent. in the last decade. The Government continue to promote the importance of higher level skills and supports excellence in higher education, including through providing significant funding for internationally acclaimed research activity through the various research councils which support postgraduate study. In the decade since 1997, the Government’s support for the UK research base has risen from £1.3 billion to £3.4 billion.

It is up to individuals themselves to decide which private finance providers to select to fund their postgraduate study. To help learners tackle the challenges arising from the economic downturn, we recently announced proposals to reposition career development loans as a key additional source of support to help people finance learning, as new professional and career development loans (PCDLs). PCDLs will offer more people the opportunity to reskill and improve their employment prospects by offering more generous terms for the learner, such as loans up to £10,000 and lower interest rates.

Like career development loans, PCDLs will be commercial loans offered by participating banks and supported by the Government. The decision on which course the loan is used for, including who provides the course, lies with the individual and that is made clear to them before they take out a loan. The Government pay the interest on the loan during the period of study, after which the individual must repay the loan capital plus remaining interest in full. Deferred repayment terms are subject to the banks’ loan policy.

Further Government funding may be available for individuals through the Access to Learning Fund (ALF). The fund allows universities and colleges to provide extra discretionary support for students in particular need; it is administered directly by universities and colleges, which are best placed to assess students’ circumstances.

We continue to work closely with the higher education sector to monitor the impact of the current economic climate on students and institutions; and the Higher Education Funding Council for England (HEFCE) are considering further measures to address the immediate needs of the economy, including funding for short courses which might lead to up-skilling.