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Annex A
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| The existing student support system |
| The system of mandatory support for higher education
students currently comprises: |
a. means-tested loans administered by the Student
Loans Company on a UK-wide basis (the SLC acts for
DfES in England & Wales, for the Scottish Executive
in Scotland, and for the NI administration in the
Province). In England and Wales, the means testing
is currently carried out by the local authority at
the student's normal place of domicile;
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b. a number of targeted grants (eg disabled student
allowance, childcare grant, adult dependants grant,
the new parents learning allowance to come into effect
in 2003/4), where the relevant local authority carries
out the assessment and either it or the SLC makes
the payments and is reimbursed by DfES;
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| c. a means-tested waiver of tuition fees, where the
relevant local authority carries out the assessment and
informs the SLC, which pays the waived sum to the institution
and is reimbursed by DfES. The tuition fee which HE institutions
charge UK and EU students is currently £1,100. |
| DfES bears the costs of the targeted grants and waived
tuition fees, including those for Welsh-domiciled students,
meets the administrative costs of the SLC (some £35 million
per annum) and bears the resource accounting consequences
of some of the Company's loans (part of which has been
sold to the private sector). The relevant administrative
costs of the local authorities (including IT equipment
and software) are met out of the authorities general funding
(under the central admin/strategic management budget headings)
which is, in turn, funded by the Assembly for local authorities
in Wales through each local authority's SSA allocation.
The WES also bears the central administrative costs associated
with policy development; statutory change including making
the necessary Regulations; updating and issuing guidance;
liaising with local authorities and the SLC; and running
a student finance helpline and website. The Department
also meets the cost of repaying the loans of teachers
starting work in priority subject areas, for English and
Welsh teachers. |
| Proposals in DfES White Paper |
| In White Paper, DfES propose to introduce a series of
new measures to assist students and ease the burden of
repayments. First, a new Higher Education Grant of up
to £1,000 a year will be introduced for new students (in
England and Wales) starting courses in academic year 2004/05
who are from households with family incomes of £10,000
or less. Some grant assistance will also be available
to students whose families earn up to £20,000 a year.
Second, from April 2005, the earning threshold at which
students will pay back loans will be raised from £10,000
to £15,000. This will apply to all new students and,
from this date, to all past students who took out loans
from 1998 onwards. |
| During this period, the Government will continue to
meet the full cost of the prescribed tuition fee (£1,100
at current prices) for students with family incomes of
up to £20,000 and pay part for those whose family income
is between £20,000 and £30,000. |
| From academic year 2006/07, higher education institutions
will be allowed to charge variable fees, between £nil
and £3,000 but only if they have Access Agreements in
place. No student will have to pay any fees up-front:
they will be able to choose to repay through the tax system
once they are earning £15,000 or more. Student loans for
living costs will continue, and the Government will continue
to meet the first £1,100 (at current prices) of the cost
of tuition fees for students with family incomes of up
to £20,000 and pay a smaller amount, on a sliding scale,
for those whose family income is between £20,000 and £30,000.
The resources set aside for the new Higher Education Grant,
some £300 million, will continue but DfES will consider
whether there would be a better way of targeting them. |
| From academic year 2006/07 onwards, students will be
able to defer paying tuition fees and the Government will
have to make up the difference in income to institutions.
Students who are paying larger tuition fees will expect
to see the extra income generated going into improved
teaching and facilities. As explained in the WES White
paper, the Government will therefore provide income to
HE institutions equal to the fee levels which they have
set and then receive payments back from students over
time. |
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