Higher Education: Student Loans

Lord Foulkes of Cumnock Excerpts

Wednesday 26th March 2014 Lords Chamber

Asked by

[Lord Foulkes of Cumnock]

To ask Her Majesty’s Government what action they propose to take over the potential impact on university funding arising from lower than expected repayment of student loans.

[Lord Ahmad of Wimbledon (Con)]

My Lords, government reforms mean our universities are now well funded, and this has been sustained through the recession. Overall, university income continues to increase, with a high-quality student experience. As has always been the case, estimates of loan repayments will continue to take account of the latest macroeconomic forecasts. It is noteworthy that application rates for 18 year-olds and, in particular, those applying from disadvantaged backgrounds in 2014 are at an all-time high.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I do not think that the Minister has answered my Question. Will he not accept that university funding is now in some disarray? We have a former special adviser to David Willetts, the Universities Minister, confirming that there is a huge funding gap—just as we warned the Government, when they increased the fees, that they had overestimated the repayments that they would get. On the one hand we have David Willetts, who will not rule out a further increases in fees, and on the other we have Nick Clegg, who said yesterday that there is,

“no need for a further increase”.—[Official Report, Commons, 25/3/14; col. 142.]

We understand that this may be yet another example of the coalition’s conscious uncoupling but will the Minister, for whom we have great respect, take the bull by the horns and make it absolutely clear that the Government rule out any further increase in university fees?

[Lord Ahmad of Wimbledon]

The noble Lord always adds colour to Question Time. The principle behind our reforms, as I have said already, was to put higher education on a sustainable footing for the long term, coupled with a rebalancing. This was of course, as the noble Lord will know, in response to and following the recommendations made by the noble Lord, Lord Browne. I believe it was the noble Lord, Lord Mandelson, who set up that particular review. As for his question on decoupling and coalition, in coalition, sometimes you agree, sometimes you disagree and sometimes you agree to disagree. That is called healthy coalition government.