Question to the Department for Education:

To ask His Majesty's Government, with reference to the review of the student finance system, (1) what steps they are taking to reduce opportunities for systemic and organised fraud identified by the National Audit Office and Public Accounts Committee; and (2) what was the rationale for paying postgraduate master's loans of up to £12,471 directly to students themselves rather than to universities, as is the practice with loans for undergraduate study.

The government’s response to the report from the Public Account Committee (PAC) into student loans issued to those studying at franchised higher education providers was published on 5 September 2024. This is attached and can also be viewed here: https://assets.publishing.service.gov.uk/media/66d9d2bfe87ad2f12182650e/E03194725_HMT_Treasury_Minutes_Sept_24_Accessible.pdf. The response sets out how the government is implementing the PAC recommendations including greater collaboration between the Department for Education, the Office for Students and the Student Loans Company to tackle risks to public money swiftly and decisively. The response, which also addresses the National Audit Office’s recommendations, confirms that the government intends to consult on proposals to strengthen oversight of partnership delivery in higher education by January 2025.

The postgraduate master’s loan is a contribution to the student’s costs of study. It can be used by students, according to their personal circumstances, to cover tuition fees which may be lower than the amount of the loan, living costs and/or other course related costs. This flexibility would not be available were the loan paid directly to the provider.