Lord Balfe
To ask His Majesty’s Government what plans they have to ease the repayment terms of Plan 2 student loans.
Lord Lucas (Con)
My Lords, on behalf of my noble friend Lord Balfe, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)
My Lords, before I answer the noble Lord’s Question, I thought it appropriate to start by mentioning the devastating news regarding the outbreak of meningitis in Kent at the weekend. Our thoughts are with the families, friends and loved ones of those who have died and with everyone who is currently unwell or affected by this terrible situation.
In response to the noble Lord’s Question, this is a complex system that remains open to review. The Prime Minister and Secretary of State for Education are looking at ways to make it fairer, and ranges of options will be considered, but we must consider how any change would be funded to be fiscally responsible. For graduates, we are working hard to tackle the cost of living by extending government-funded childcare, reducing energy bills, freezing rail fares and rolling out free breakfast clubs.
Lord Lucas (Con)
My Lords, I am grateful to the noble Baroness for that Answer, and I declare an interest as the father of a daughter who is currently accumulating these loans. Does the noble Baroness agree that, particularly for students whose courses are not of the quality required to generate returns of the order of the amount spent on them, and who have accumulated student loans, it would be a good idea to audit what universities are doing and why they are putting our children in this degree of debt?
Baroness Blake of Leeds (Lab)
In our manifesto we committed to raising teacher standards in higher education. Every student deserves the best possible quality from their investment. I am pleased to say that we are working closely with the education sector and providers to make sure that that quality is, first, across the board but also maintained.
Baroness Deech (CB)
Does the Minister agree that the situation has gone too far for tinkering? We need a fresh start. As I said yesterday, we need a Select Committee in this House on education. But does she agree that it is time for something radical, such as a graduate tax or complete exemption for those who repay their debt to society immediately—the students of medicine, teaching and nursing?
Baroness Blake of Leeds (Lab)
I always listen to the noble Baroness’s questions with interest. I do not think it would be right for me to pre-empt the ongoing discussions. I think there is a general recognition that something needs to change, but it has to be done in the spirit of fairness while maintaining access for all students and making sure, as I said at the outset, that it is fiscally responsible in a complex financial situation.
Lord Mohammed of Tinsley (LD)
My Lords, I declare my interest, as I did last week, as my son recently graduated and my daughter has just started university. Will the Government consider reducing or capping the interest rates applied to Plan 2 loans, particularly during periods of high inflation, because students may well see their debt grow while they continue to make repayments?
Baroness Blake of Leeds (Lab)
The noble Lord refers to a complex situation, and it would be completely wrong of me to make any suggestion about changing interest rates or methods of repayment. But of course, all these matters are under consideration in such an important subject.
Baroness McIntosh of Hudnall (Lab)
My Lords, does my noble friend agree that is quite difficult to determine the value of certain kinds of degree course if the only measure used is what you can earn after you have completed them? Would she further agree that there are some sectors which are extremely important to the health of our economy and our general well-being, such as the arts and the cultural sector, in which it is pretty difficult to earn very high salaries, but the value of the people who are in those sectors is worth appreciating just as much?
Baroness Blake of Leeds (Lab)
I absolutely support my noble friend’s view of the value of a university education; it cannot always be measured in monetary success. But obviously, the outcomes of students going to different institutions is a measure that is looked at—how many of them get into employment, what that employment is and whether they go on to further training. It is true that there are some narrowly held preconceived views about the value of some courses that actually do an enormous amount, not only for the well-being of the students but for the economy and well-being of the country.
The Earl of Effingham (Con)
My Lords, it appears that EU officials are demanding that EU students pay home fees rather than international fees in order to benefit from a UK university education under a new youth mobility scheme. This was not in the framework signed last year. It may cost our universities up to £140 million annually. Surely it is our students who deserve help. Will the Minister rule out international students paying domestic fees?
Baroness Blake of Leeds (Lab)
I think it is well above my pay grade to interfere in the ongoing negotiations with the EU. It is imperative that we let those negotiations take their full course, and then we will report back at the appropriate time.
Baroness Butler-Sloss (CB)
May I ask the Minister whether she accepts that the present system is unfair?
Baroness Blake of Leeds (Lab)
What I will say is that the imperative, for whatever comes in, is that fairness is at the centre of what we do. We have to make sure that the question of being able to afford studying is not something that puts people off. Courses should be available to all young people, regardless of their family backgrounds. That is a principle we have to hold on to and make sure is at the centre of any discussions we have going forward.
Lord Watts (Lab)
My Lords, is the Minister as amazed as I am that, after 14 years of the previous Government, when they introduced no changes and left us with a mess, they are now coming up with policies to reduce costs for students? Why did they not do it for 14 years?
Baroness Blake of Leeds (Lab)
My noble friend is absolutely right. The student loan situation is one we inherited from the Opposition. I think they have questions to answer about the approach they took. We will not take any lessons on how to do this. We are determined to move forward and do it properly on behalf of the young people of this country.
Lord Tarassenko (CB)
My Lords, the proportion of home students in full-time postgraduate study has fallen from 46% to just 29% in five years. At the start of a PhD, a home student with a typical undergraduate loan will have a debt of around £55,000. At the end of the PhD, that debt will be somewhere between £65,000 and £70,000. Most PhD students from disadvantaged backgrounds take out a doctoral loan, which also accrues interest during the PhD. Will the Government consider freezing both the undergraduate and doctoral loans at the start of a home student’s PhD so that these loans do not accrue interest during the PhD?
Baroness Blake of Leeds (Lab)
That is an interesting observation and one that I am sure will be considered in the round. These matters will be looked at and reviewed as we go forward, through the lens of fairness for all.
Lord Sandhurst (Con)
My Lords, the problem was well known before this Government came into office. The Government have been in power for 20 months or so. Why is there still no plan?
Baroness Blake of Leeds (Lab)
My Lords, a month of us being in power roughly equates to almost a year of the Opposition being in power. As I said at the beginning, we are moving forward in addressing affordability and cost-of-living measures, as well as looking at this very complicated area of student loans.
Baroness Garden of Frognal (LD)
My Lords, the presence of EU students in our universities has always been a net benefit to our students, enhancing their breadth of vision and making them understand how other people live. Is it not time we looked again at introducing better ways for EU students to attend our universities?
Baroness Blake of Leeds (Lab)
Any young person who has the opportunity to mix with other young people from around the world will talk of the benefit that brings. This area is of enormous importance. It is not only about students coming here, but where our young people want to go to achieve their future success.