Greater Income Support at University 2006

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Published: 07 December 2004

Greater Income Support at University 2006

Lifelong Learning, Further and Higher Education Minister Kim Howells has recently welcomed the latest Student Support statistics which show that low income and middle income students will have access to greater support whilst they are at university from September 2006.

The latest Statistical First Release on student support shows that:

The average full-time student has to currently find £575 each year in upfront tuition fees.
57% of full-time students have to pay for all or some of their tuition fees before or whilst they are studying.
The maximum amount of student support for the lowest income full-time students starting in September 2004 was £6,050 for those living in London and £5,095 for those living outside the capital.
81% of eligible full-time students in the UK are taking out a student loan and the average amount they are taking out is currently £3,190 each year.

Kim Howells said:
"We have taken tough decisions because it is absolutely vital fort the economic success of this country that we have the best educated and highly skilled workforce, and that means expanding higher education.

We can't sustain a 21st century higher education system with a 20th century funding model.

But, we have made sure that all full-time students will get the financial help they need when they need it most - that is, while they are studying.

These figures show that 57% of full-time students are having to pay for all or some of their fees before or whilst they are studying and the average they are having to find is £575 each year.

From September 2006, universities will be able to charge up to £3,000 per year but no full-time student will have to pay any upfront fees.

This will save middle income families an average of around £1700 in upfront payments for a traditional three year course.

Middle income families will also benefit from above inflation increases in all levels of student loan with the biggest beneficiaries being students who study in London.

When the maximum maintenance grant increases to £2,700 in September 2006, low income students beginning their courses will be even better off whilst they are studying.

These statistics show that 81% of eligible full-time students in the UK are taking out a student loan and the average amount they are taking out is currently £3,190 each year.

Average graduate debt will of course increase once variable fees are introduced.

But, because the repayment threshold is rising to £15,000 from April 2005 every one of these students who will still be repaying their loans next year will actually be repaying less per week than they were before.

And because there is no real rate of interest charged on their outstanding amounts they will not be penalised for repaying less.

This Government will be increasing the student support available to all full-time students. The real term increases will give students more support when they need it most.

The fairer repayment deal will mean that all graduates will repay their fees on equal terms and will all repay less per week than they do now. University will become more affordable at the point of use and fairer at the point of repayment.

This means that no student should let living costs or concerns about student debt be a barrier to their university aspirations."

The future of student support has now been secured through the passage of the Higher Education Bill which received Royal Assent in July 2004.

The main features are:

Universities and higher education colleges will be able to charge up to £3,000 per year but no tuition fees to be paid before or whilst studying.
New Government loans will be available to cover the fees.
Full-time students going into their second, third or fourth year and beyond will still get charged around £1,200 every year but they will also have access to the Government loans for fees as well.
Graduates will only repay the loans when they start earning £15,000 and then at a rate linked to income.
The new fee loans are not like commercial loans; they do not attract a real rate of interest.
This means that it is what you earn, not what you owe that matters. The more you earn the more you repay each month, the less you earn the less you repay and if you don't earn over £15,000 you don't pay back a penny.
Bigger student loan debt does not mean bigger repayments. In fact, because we are increasing the repayment threshold from 10,000 to 15,000 all graduates will be repaying less per week than they do now.
Any outstanding amounts of debt will be written off after 25 years.
More generous maintenance grants of up to 2,700 each year.
Bigger student loans to cover living costs. London students will see the biggest increases.