My Lords, in the 2015-16 financial year, to date around 5,000 loan applications have been accepted by the banks. That is consistent with previous years. Only when a student commences study does the loan become live. At that point, the system identifies those undertaking postgraduate courses. As most do not begin until late October, it is not yet clear what proportion of applicants are for postgraduate courses.
I thank the Minister for that Answer. The lack of information on this account is disturbing, since it means that the Government are paying too little attention to a matter of national importance. The truth, as I perceive it, is that inadequate financial support has been given to our native postgraduate students. It appears that the banks, on which the Government are depending to provide loans to students, have not been sufficiently forthcoming. Such loans are demanding the exorbitant rate of interest of 10%. That must surely have deterred many postgraduate students from contracting such loans. I seek an assurance from the Minister that the Government are aware of these deficiencies and that they are taking steps to amend the situation.
Over 250,000 people have been lent over £1.1 billion since 1988 under these loans. But the noble Viscount will be aware that the Government have just closed their consultation on a new postgraduate loan, which specifically targets postgraduates. This would be the first time that such a loan would be introduced. We are due to publish the response and final scope of that policy in the autumn, but the NUS vice-president has welcomed it, saying that it is step in the right direction, and the chief executive of Universities UK has said that it is good news so we are certainly doing what we can in this area. This new loan will be extremely welcome.
Will the Minister say what the Government are doing to work with universities to ensure that qualified UK postgraduates are encouraged to continue their academic careers—particularly those from disadvantaged backgrounds—and not deterred by unacceptable fee levels and the costs of loans?
Well, as I said, obviously the professional career development loans exist at the moment, but the new postgraduate loan, which has been welcomed across the sector, will come in shortly. The consultation has closed and the full scope of that policy will be announced later in the autumn. Certainly, encouraging further study and making sure that everyone has access to the training and education they need are at the forefront of the Government’s mind.
My Lords, may I wish the noble Baroness a speedy recovery from what looks like a very awkward injury, attractively dressed in the blue to match her suit? For those who cannot see it, she is struggling to answer and almost strangling herself in the process.
It seems that almost a sense of panic is setting in. We have £50 million of emergency bursaries from HEFCE to bridge the gap until the new schemes come in. We have postgraduate and career development loans, which are £10,000 per student, but with 10% interest rates charged to be repayable within three weeks of graduating, and we then have the Government consulting on a £25,000 income-contingent loan. Yet there is a 10% reduction in the numbers of people going on to become postgraduates on taught courses. Is there not something more we can do?
This Government will be the first to introduce a loan specifically targeted at postgraduates, so we are taking this extremely seriously. On the interest rate point on career development loans, over the course of the loan the interest rate is more like 6%, because the Government pay the interest while students are studying. That is not to say that more cannot be done, but I assure the House that the Government are focused on higher education and consider it to be extremely important.
Will the Minister please tell the House how far the Government are encouraging industry to help postgraduate students? Industry will benefit from the specialised courses that students do, so it is right that it should make some contribution.
I entirely agree with the noble Baroness, and we are having regular discussions with businesses. Of course, a number of businesses have responded to the consultation. The noble Baroness is absolutely right that it is something that benefits business and the UK economy, and the Government are working hard to ensure that businesses play their part.