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Higher Education Funding and Student Finance (Supplement to Statement)

Volume 518: debated on Tuesday 9 November 2010

During the statement I made to the House on 3 November 2010, on higher education funding and student finance, and repeated by Baroness Wilcox in the other place, I regret that the description of the proposed maintenance package was incomplete.

The statement said:

“There will also be increases in maintenance loans for students from families with incomes from £42,000 to £60,000”.

The current maintenance support system is complicated. The maintenance grant is means-tested: when the maintenance grant was reintroduced in 2004 and 2006 it was in partial substitution for maintenance loan and hence the means-testing now involves a number of tapers by which maintenance grant is reduced with increasing family income. The result is that it is difficult for students and their families easily to calculate the support they are entitled to; and it adds to the administrative burden on the Student Loans Company in calculating means-tested entitlement.

It is in order to simplify the system that in the proposed maintenance arrangements for 2012-13 academic year and beyond, the multiple tapers for maintenance grants have been substituted by a single taper, and the reduction in total support (maintenance grant and maintenance loan taken together) as income increases is a more constant one.

As a result of the sum of these changes, almost all students receive an increase in their total financial support, but there is a very small proportion of students who will receive less maintenance loan than they would have if they entered under the old system. Students with a household income of around £49,000 to £53,000 will receive, on average, £120 less in maintenance loan. This equates to a 2.5% reduction for around 2.5% of students.