Sharia-compliant Student Finance

Lord Forsyth of Drumlean Excerpts

Wednesday 13th November 2024 Lords Chamber

[Baroness Smith of Malvern (Lab)]

My noble friend is right. That is why, in working towards the lifelong learning entitlement rollout, we will also be making progress towards delivering the alternative student finance. We will be able to look at the details about the progress that has already been made and the steps we still need to make in the working group, which I am glad that the noble Lord, Lord Sharkey, will be able to attend.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am grateful to the Minister for answering my Written Question as to what the nominal value of student debt will be. In her answer, she said that, in five years’ time, the cumulative total debt will be £540 billion and, in 10 years, £869.4 billion. I understand that this is being used to kind of create more headroom for the Government’s borrowing. Is she really satisfied with student debt soaring to those levels?

[Baroness Smith of Malvern (Lab)]

I am not sure whether the noble Lord is arguing for a wholesale reform of the student funding system—it would be legitimate if he were, although this Government have taken a different route at this point. I think it is important, notwithstanding the impact on the national finances, to be clear for individual students that an increase in their tuition fees and the loan they take out to fund them will not increase their repayments, because repayments of this loan are wholly linked to earnings levels, so no student will repay higher levels per month as a result of the most recent decision that the Government have taken to increase tuition fees.