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Education (Student Support) Regulations

Volume 704: debated on Wednesday 29 October 2008

Today my right honourable friend the Secretary of State for Innovation, Universities and Skills (John Denham) has made the following Written Statement.

This Government believe that everyone with the talent and ambition to enter higher education should be able to benefit from the opportunity. Investment by this Government means that by the end of this Comprehensive Spending Review period in 2010-11, government funding will have risen by nearly 30 per cent in real terms since 1997. There are 287,000 more higher education students than in 1997 and the unit of funding has been maintained in real terms. We have also succeeded in raising aspirations—over 50 per cent of young people from every social background and every part of the country aspire to go to university.

Finance should not present a practical barrier to students wishing to study at university. In 2006, the Government introduced a new system of student financial support which offered a maximum grant of £2,700 and a minimum bursary of £300 annually for students from low income households. In July 2007 I announced that, from 2008-09, this scheme would be significantly enhanced by raising the family income thresholds for both full and partial grants. At the time, I told the House that our intention was for one-third of students to receive a full grant and a further third a partial grant. The new system came into effect this academic year.

It is now expected that about 40 per cent of students may receive the full grant. The total number of students receiving a full or partial grant will also exceed the original projections. I have decided to make extra money available in response to this higher demand for student support so that total spending on the student financial support system will rise above the levels set out in July 2007. Spending will increase by a further £100 million per annum when the revised system reaches steady state. 

For students coming into university in 2009-10 student support—like the child tax credit—will focus help on families earning up to £50,000 who are doing the right thing by supporting their children to go to university:

the family income threshold for the full grant will remain at the enhanced level of £25,000, which we expect will provide around 40 per cent of students with a full grant, exceeding the intention announced last July for one-third of students to receive a full grant;

the family income threshold for a partial grant will be £50,020, which means that all students with household incomes of £18,360 to £50,020 will be eligible for higher levels of grant than in 2007-08;

all students with a household income of £18,360 to £57,708 will be eligible for a more generous package of grant and loan support than in 2007-08; and

consequently, we are maintaining the intention that two-thirds of students should receive either a full or a partial grant.

The new student support arrangements will be applicable only to new students entering higher education in 2009-10. Existing students will receive the same support as they were entitled to receive when they started university.

I propose to lay before Parliament amending regulations to adjust the eligibility for student grants and loans. Following approval by Parliament, they will take some weeks to implement. I have therefore asked the Student Loans Company to begin processing applications for student support in the New Year.

The full annual impact of these changes will reduce the cost pressure by £100 million. For the rest of this spending review period it will be necessary to make incremental adjustments to the DIUS budget, which totals over £20 billion. My department is well on the way to identifying £1.5 billion of cash-releasing efficiency savings over the period, and further reductions will be sought. I also plan to deploy some of the departmental unallocated provision.

In making changes, we will:

maintain the ring-fenced science budget;

maintain the unit of funding for students in higher education;

continue to increase HE student numbers annually towards our participation target; and

continue to increase investment in further education and skills, including expansion of the Train to Gain programme.

I am today asking HEFCE to allocate no more than 10,000 additional student numbers for 2009-10. This means that, in 2009-10, there will be 30,000 more funded students (full-time equivalent) compared to 2007-08.

Details of other budget changes will be made available at the appropriate time in the usual manner.