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Financial protection for Scots students
24/06/2004
A package of measures to protect Scottish students from
the consequences of the UK Government's plan to introduce
variable fees was announced today.
Lifelong Learning Minister Jim Wallace announced that
the Executive will fund loans for Scottish students
studying in England of up to £3,000 per year to enable them
to pay for the variable fees associated with their chosen
course.
He also announced plans to increase fees for students
from the rest of the United Kingdom coming to Scottish
universities from 2006, arguing that it would allow the
Executive to protect the opportunities for Scottish
domiciled students to take up places at Scottish
universities.
Mr Wallace told MSPs in the Parliament that "the
decisions taken have not been arrived at lightly" but that
the Executive had "an absolute priority to ensure that
Scottish domiciled students are not disadvantaged as a
result of the Westminster proposals."
The Minister pointed to the 12 per cent increase in
applications to study in Scotland this year by UK students
as evidence of the threat posed to Scottish domiciled
students and told the chamber that "I am absolutely certain
that doing nothing is not an option."
The key elements of the proposals are:
• An increase in the fee element paid by students from
the rest of the UK to study undergraduate courses in
Scotland. This increase will be in the region £500 to £700
making the total fee somewhere between £1,700 and £1,900.
• Scottish domiciled students will continue to have
their fees paid on their behalf by the Student Awards
Agency for Scotland (SAAS).
• Scottish domiciled students going to English Higher
Education Institutes (HEIs) will receive the same level of
support for fees as English students and will not have to
pay fees up-front. They will receive a loan for fees from
the Executive.
• The current Quigley agreement whereby the Executive
pays for the 4th year fees for eligible non-Scots domiciled
UK students will be abolished. The extra year of study in
Scotland will be factored into the setting of the new fee
level. Transitional arrangements will remain in place until
the final year of study for those eligible students who
start courses before 2006.
• The Executive will examine the case for setting a
separate higher flat-rate fee for medical students from
outside Scotland as a way of addressing the difficulty of
recruiting sufficient numbers of graduates to the NHS in
Scotland.
The Minister said:
"Today I am announcing two sets of related changes which
will protect Scottish domiciled students wherever they
choose to study. These will take effect from 2006-07.
"The first of these deals with the position of students
from Scotland wishing to study in England. Following the
changes being proposed by the UK Government, from 2006-07,
Scottish students going to England will have to pay any
variable fees associated with the course they choose to
study. I can announce today that the Executive will
provide these students with a subsidised student loan to
cover their whole tuition fee cost - up to £3,000 a
year.
"We are very conscious that providing support for both
fees and living costs in the form of a student loan would
mean that some Scots studying in England would risk
building up high levels of debt.
"To reduce this we will also be greatly improving the
bursaries available for this group, replacing up to £2,000
of the student loan for living costs with a means-tested
bursary. Students whose parents earn up to £20,000 or
whose spouse earns up to £18,000 will receive the maximum
bursary and some bursary will still be available up to
income of around £30,000.
"This takes me onto the second element of the package
being announced today. Non-Scots UK students who choose to
study here are already asked to pay a fee of £1125 each
year. With usual uplifts for inflation that figure will
stand at £1200 in 2006-07. So courses in Scotland could
become a much cheaper alternative and the pressure on
places here could increase significantly, to the detriment
of Scottish applicants. Early indications, such as the 12
per cent increase in applications to study in Scotland this
year by UK students, highlight very clearly the risk we
face if we do nothing.
"Presiding Officer, I am absolutely certain that doing
nothing is not an option. Of course, this is a difficult
issue. Tough choices have had to be made and I can assure
Members that the decisions taken have not been arrived at
lightly. In our deliberations I have never lost sight of
the fact that my first responsibility is to protect the
interests of Scottish-domiciled students.
"My Cabinet colleagues and I have discounted the
option of quotas in our universities based on domicile -
and I am not aware of any serious advocates of that
approach. The obvious and sensible alternative therefore
is to bring the cost of study for non-Scottish UK students
closer to what they will be charged elsewhere.
"From 2006, we will increase the current flat rate fee
payable by other full-time students, mainly those from
elsewhere in the UK, by more than inflation. By how much
will depend on the final decisions taken in England. With
different English universities able to charge different
fees for different courses, at anything from zero to £3000
per year, offset by a potentially complicated range of
institutional bursaries, the final position south of the
border will not be clear until at least the end of the
year.
"That makes it impossible for Ministers here to
determine precisely what increase we will put in place but
I do want to give Members a very clear indication of the
fee range we are considering.
"We will be guided by certain clear principles. For
example, there is no desire to make 4-year courses in
Scotland more expensive in terms of overall fee cost than
3-year courses in England. We will take that into account
in setting the level of fee. We have no desire to make
Scottish universities more expensive than their English
counterparts in terms of overall cost. The new fee should,
however, be sufficiently high to influence demand.
"Our best estimate at this stage is that we will raise
the existing annual flat-rate fee by between £500 and £700,
so that the overall figure in 2006-07 will be in the range
£1700 to £1900.)
"One other issue we will wish to examine is that raised
by both the Calman report, published earlier this month,
and the evidence of the British Medical Association to the
Enterprise and Culture Committee's inquiry. Professor
Calman highlighted that around half our medical students
already come from outwith Scotland. Calman noted that the
changes in fee levels in England might make the difficulty
of recruiting sufficient numbers of graduates to the NHS in
Scotland worse. As part of the consideration of the
implementation of this change, we will therefore examine
the case for setting, exceptionally, a separate, higher
flat-rate fee for medicine.
"Presiding Officer, these have not been easy decisions.
But I firmly believe that this is the right way forward in
terms of managing cross-border student flows following the
changes we expect to happen in England in two years time.
This is a balanced package, a measured response, that
unashamedly puts Scottish domiciled students at its heart -
protecting their opportunities and their choices. I commend
it to the Parliament."
Background
Subject to final parliamentary approval at
Westminster, from 2006-07 variable tuition fees ("top-up
fees") of up to £3,000 per year will be charged by
individual higher education institutions in England, to all
new UK and EU students.
The Northern Ireland Office is currently consulting on
the introduction of the same approach in Northern Ireland.
The Welsh Assembly Government has not yet made any
decisions about future arrangements, but has stated that no
change is expected until 2007 at the earliest.
Scottish-domiciled students studying in England
From 2006 English students, wherever they study, and
EU students in England, will no longer receive means tested
fee remission but will be able to defer the payment of fees
until after graduation by receiving a student loan for the
full amount, repayable when their earnings reach a certain
threshold, currently £10,000 but due to rise to
£15,000.
The Executive will now provide new Scottish domiciled
students studying in England from 2006 with non-means
tested loans for the full amount of the fees charged (up to
£3,000).
The same loan repayment threshold of £15,000 will
apply. EU anti-discrimination rules mean
that Scottish-domiciled students studying in England have
to be treated in the same way as the UK government treats
EU students in terms of tuition fee support.
This means the Executive will not be able to retain the
means-tested fee remission currently provided to Scottish
students in England. However, this means the money
currently spent on fee remission can be used to replace up
to £2,000 of the student loan for living costs provided to
these students with a means-tested bursary.
Fee Levels for Students not supported by the
Student Awards Agency For Scotland (SAAS)
Full-time Scots-domiciled and non-UK EU students
undertaking study up to first degree level, including PGCE,
in Scotland ("SAAS supported students") have not paid fees
since the abolition of fee contributions in 2000-01. This
will not change.
However, in order to generate resources to meet the new
costs of additional support for students studying outwith
Scotland, and as the principal mechanism for controlling
cross-border demand, the existing fee rate will rise for
other full-time students in Scotland who are not
SAAS-supported but who are eligible to take up a
publicly-funded place - mainly those from the rest of the
UK: England, Wales, Northern Ireland, the Isle of Man, the
Scilly Isles, and the Channel Isles.
These students already pay a subsidised flat-rate fee
(currently £1125), which is uprated annually in line with
inflation. In 2006-07, this flat-rate fee for full-time
students will be increased faster than inflation.
A single higher fee will apply for all institutions and
all courses - with the possible exception of medicine.
Although this far ahead of decisions in England, it is not
possible to set a precise figure, the Executive expects the
fee increase to be between £500 and £700 per year. That
would mean that instead of a fee of £1200 - the amount
expected in 2006-07 if the current fee were only raised by
inflation - the fee would be between £1700 and £1900.
Mechanism
The Executive provides its funding to higher
education institutions through two routes: SHEFC provides
the main grant, while SAAS provides a separate income
stream of £1,125 per Scottish student. In making its grant
allocations, SHEFC currently assumes that each institution
receives £1125 per student. For non-SAAS supported
students, the institution covers that cost by charging the
student a fee directly for that amount.
In future, more of the funding to institutions for
full-time students will be channelled through SAAS and less
through SHEFC. The change will be introduced so that it is
neutral on the overall income individual institutions
receive per student.
Similar changes will be made for the Scottish
Agricultural College, which is the only institution funded
directly by the Executive, through the Environment and
Rural Affairs department. There will need to be a transfer
of resources from SHEFC to SAAS to underpin this
system.
The Executive will work with the higher education sector
to ensure that the transfer of funds is transparent and it
is clear that there has been no overall loss of funds per
student to the sector. Indeed, even though the first call
on the resources generated will be to finance additional
support for Scottish students studying south of the border,
the Executive expects higher fees for fee-liable UK
students to create a small surplus, which would be used as
a pooled resource for the sector.
In summary, therefore, the current position for
SAAS-supported Scottish (and EU) students who do not pay
fees remains unchanged; for other students, the current
system of a flat-rate fee which does not vary between
institutions or courses, subject to a final decision on
medicine, will be retained - that fee will simply
increase; for individual HEIs, income will continue to be
the same for students from all parts of the UK; and the
first call on extra funds generated will be to provide
additional support to those students going south.
Next Steps
Final decisions on any further exemptions will be
made by the autumn. Final decisions on the 2006-07 fee
level will need to await further information on the
position in England. The Executive intends to make a final
decision on the 2006-07 fee level around the turn of the
year.