Education Bill

Baroness Brinton Excerpts

Tuesday 1st November 2011 Lords Chamber

Moved by

[Baroness Brinton]

89ZA: After Clause 73, insert the following new Clause—
“Repayment of loans for part-time students
No part-time student shall be required to repay their loan until—(a) they have completed their studies, or(b) four years and six months has passed since the start of their course, whichever occurs first.”

[Baroness Brinton]

I rise to speak to Amendment 89ZA in my name. I thank the Minister for her letter of 25 October, in which she reports that the Minister for Universities and Science has agreed to accept that the statutory repayment date for all those studying part-time will be the April that falls four years after the start of their course. This seemingly small decision will have a very large impact on part-time students across the country, and I am absolutely delighted with the news.

The Open University has said it will make a significant difference to many of its over 200,000 students, and Birkbeck College has written to me to say that this is also very important for its non-traditional students, who are often juggling their study with work, mortgages and family commitments. I am also concerned that we need to ensure that the budget for widening participation, which the Government have provided this year and is being distributed by HEFCE, continues because these non-traditional students must get the right support to enable them to access the university courses that they need. I hope that the Government will ensure that the current HEFCE widening participation grant will continue beyond 2012.

I also thank the Minister for arranging a meeting with the Minister for Universities and Science later this week. I wish to raise with him the points I covered in Grand Committee, which also relate to the issue of part-time students repaying their loans. First, I am hoping for confirmation that the arrangements for part-time higher education students on fee loan repayments will also apply to the other new group of students now able to access loans to cover fees—that is, adult students over 25 studying a level 3 qualification, including but not only access to HE. That would, after all, be only fair and equitable.

Secondly, in Grand Committee I mentioned a letter from the Minister for Universities and Science to million+ at the beginning of September regarding the proposed government fee caps for part-time students, which may well leave universities and part-time students with an inadvertent problem. The impact assessment for the Education Bill says:

“The Bill also proposes to give the Secretary of State the power to specify in regulations the maximum tuition fee that higher education institutions (HEIs) may charge part-time undergraduate students in a given year. The level of the cap will be set through regulations, and the Impact Assessment will be published at that stage.

The current proposals for the cap, taken in isolation, will have no significant costs and benefits that can be monetised. This is because our analysis suggests that part-time course tuition charges do not currently exceed the maximum amounts proposed for the cap. The upper fee amount will be £6,750. The lower fee amount will be £4,500”.

This means that for part-time students there are proposed fee caps of £6,750 and £4,500, which relate to 75 per cent of a £9,000 full-time fee and 75 per cent of a £6,000 full-time fee respectively. This proposal assumes that part-time students do not study at more than 75 per cent intensity and that universities would be seeking to raise part-time fees excessively if the cap was higher than that proposed by BIS. This fundamentally misunderstands how part-time students study. In practice there is inevitably a good deal of flexibility in relation to the intensity of study, which may vary according to circumstance, such as work, family commitments and the number of modules that students have been able to study in previous years.

Part-time and full-time study are both based on modules and credits rather than percentage intensity. There are 120 credits in an academic year and it would be much more helpful for students if universities were able to charge these part-time fees on a pro rata basis linked to credits undertaken and the full-time fee set by the university for the course in question, with an eligibility floor of 25 per cent intensity. This would provide more flexibility for students and would be no more costly overall in respect of fee loans, especially since part-time students will not be eligible for maintenance loans or grants.

Pro rata charging would also ensure that there was equity of funding between full-time and part-time modes as well as transparency of costing. The most transparent costing methodology is credit based, but this will not work if students and universities are limited in how they deliver their courses. As well as being difficult for universities to administer, this arbitrary cap of 75 per cent could well have many perverse consequences. These could include students on the same courses and studying at the same intensity being charged different prices as a result of studying at different intensities in previous years. It could mean that students end up paying less or more than 100 per cent of their degree cost.

I am quite sure that the Government never planned for this law of unintended consequences to prevail, and I am looking forward to discussing this with the Minister and the Minister for Universities and Science later this week. I hope that we will be able to have a letter on this complex issue before Third Reading.

To end on a high note, and to make it absolutely clear to the Labour Opposition, who seem to have taken delight in mischievously not noticing when the Government have given significant ground on issues, I thank the Government for changing the fee loan repayment arrangements for part-time students, so that now they match the arrangements for full-time students. Our universities will now have a clear message that part-time higher education will be free at the point of study for the vast majority of students. I beg to move.

--- Later in debate ---

[Baroness Verma]

My Lords, first, I thank my noble friend and the noble Lord for their warm welcome to the Government’s response. The amendment in the names of my noble friends Lady Brinton and Lady Sharp, and the noble Lord, Lord Stevenson, seeks to extend the repayment due date. I also thank them for championing this point and apologise for the delay in arranging a meeting with my right honourable friend the Minister for Universities and Science and myself. As noble Lords know, I take pride in delivering on my commitments and I am sorry that there has been this delay.

My right honourable friend has listened carefully to the debate in this House. He has considered all the arguments and has asked his officials to have those further discussions. While we are not able to accept the amendment as it was laid, I am pleased to confirm that through secondary legislation we will set the repayment due date for part-time students as the April which falls four years after the start of their course or the April after a student leaves their course if that is sooner. A letter has been laid in the House Library to this effect, and I am pleased to note that this change has been resoundingly welcomed by the sector.

My noble friend Lady Brinton asked about widening participation. To ensure a fair deal for poorer students, we have announced a new £150 million national scholarship programme to support students from disadvantaged backgrounds. I will write to my noble friend on HEFCE’s widening participation funding. I also hope that she and the noble Lord will take the opportunity later this week to discuss this and all other issues raised by noble Lords today with my right honourable friend.

My noble friend and the noble Lord asked about regulation. My noble friend proposes a more rigid system of regulation than that put forward by the Government. We do not believe that there is evidence that such a system is needed. Our proposals establish a common framework within which higher education institutions have flexibility to set their own pricing. They need to be sensitive to the level of pricing that potential students will bear. Part-time students may simply not accept charging over and above the relevant proportion for their full-time equivalent. Our proposals protect students by ensuring that their loan will cover the full amount charged and by securing investment in widening participation and fair access. We will of course carefully monitor the new system and, if we need to, we will review and revisit it.

The noble Lord, Lord Stevenson, asked about the regulatory burden. This cap will enable higher education providers to set their own charges as they do now but up to a maximum amount specified in regulations. We do not believe that this will cause an unnecessary regulatory or administrative burden. Our proposals establish a common framework.

I look forward to further discussions with the noble Lord, Lord Stevenson, and my noble friends Lady Brinton and Lady Sharp. This week, my right honourable friend will speak to them and I hope that we will have some fruitful discussions. Therefore, I hope that my noble friend will withdraw her amendment.

[Baroness Brinton]

I thank the Minister for her response and the noble Lord, Lord Stevenson, for his contribution. There is much agreement about the principle of the repayment of fee loans for part-time students. The other issues raised are complex and they sit beneath the primary legislation. I am grateful for the meeting to be held later this week and I am pleased that the Minister thinks that we can have fruitful discussions.

The only point that I would make is that neither myself nor the noble Lord, Lord Stevenson, think that we are proposing a tighter regulation base. In fact, the present system will constrain universities and students because it is rigid and, as I said earlier, may provide a law of unintended consequences where some students may bizarrely end up paying more than the cost of their course because of this structure of breakdown. Those are the discussions that I hope we are aiming for.

As I said at the end of my speech when introducing this amendment, I want to end on a positive note. I thank the Minister and the Government for agreeing to the principle of this amendment. I look forward to the revised legislation coming through and I beg leave to withdraw the amendment.

Amendment 89ZA withdrawn.