Scottish Higher Education in the 21st Century

Exellence in higher education is increasingly recognised to be at the root of economic success. The benefits which flow from advanced study also contribute to improving the society we live in. In Scotland, we have a higher education sector to be very proud of. I am committed to ensuring we can invest in higher education and reap the considerable benefits for years to come.

We already invest almost £1 billion each year in further and higher education in Scotland. Our funding for teaching is some 10 per cent higher per student and we have much greater participation among young people than the rest of the UK. That places great demands on funding.

We cannot avoid difficult decisions. Sir Ron Dearing’s National Committee of Inquiry into Higher Education, and Sir Ron Garrick’s Scottish Committee, made clear that we must look to new sources of funding. The Government has recognised that, as a country, we cannot have the higher education system we want for the 21st century with student support arrangements developed for the 1970s.

This leaflet provides further detail of the Government’s proposals for the new arrangements to support new students in 1998-99. Together with the more detailed booklet it responds to the call for a full explanation of the new policy, and fulfils our commitment to provide the detail before those considering entering higher education in 1998-99 make their final decisions. The new arrangements apply only to new students. Existing students will continue on the existing system. That is only fair.

The new proposals are a fair and efficient solution to update and modernise the way Government provides financial support to students.

We propose that students from better-off backgrounds make a contribution towards tuition costs. Around 40% of students in further and higher education institutions will not pay.

Overall, the Government is looking to graduates to make a greater contribution to the costs, recognising that they are the principal beneficiaries. Research evidence shows that on average graduates earn 20 per cent more than non-graduates, largely as a result of the skills they have developed at university or college. It is fair that we look to those graduates who reap the benefits of higher education to contribute to the costs.

The possibility of higher debt among students cannot be wished away. The terms of repayment are fair - they vary with income and are income protected. Those graduates who, for whatever reason, earn a modest salary will have full protection. The fair system of repayments proposed by the Government will fulfil our Manifesto pledge to ensure students have access to a fair system of support when they need it.

We are not looking to parents or spouses or to students to face higher upfront costs than they already do. The new system will not increase financial hardship amongst students, and we are introducing a supplementary loan for those most in need. Parents and spouses on low incomes will not be asked to contribute financial support.

We have carefully considered the position of longer Scottish honours degrees. The Government does not consider it fair that Scottish students should pay any more in tuition fees than other UK students to achieve a comparable degree. They will therefore not do so under the Government's plans.

The linchpin of a fair and balanced arrangement for student support is that no-one should be barred from higher education on financial grounds. We propose to do more in the future to break down barriers and encourage students from backgrounds with no higher education tradition into the sector. We cannot achieve our objectives for a high quality higher education sector and encourage wider access with underfunded universities and colleges. Our proposals set out here provide a long term solution on funding. It is the right first step for us to take.

BRIAN WILSON
Minister for Education and Industry November 1997

Investing in the Future:
Supporting Students in Higher Education - A Summary

A new set of arrangements for student support will be in place for new students entering higher education for the first time in Autumn 1998. This leaflet explains what these will mean to students and their families and to schools, colleges and universities. The new arrangements set out here apply to students whose homes are in Scotland.

They only apply to new students. Those already at university or college, who have started a higher education course or who had applied for a gap year will continue with their existing grants and loans and pay no fees until graduation.

More detailed information is available in "Investing in the Future: Supporting Students in Higher Education: A Guide", copies of which have been sent to all schools, higher education institutions, further education colleges, Local Enterprise Companies, career services, student unions, public libraries and Members of Parliament. Copies of the Guide and further copies of this leaflet can be obtained by phoning 0131-244 8075, or by writing to the Student Awards Agency for Scotland, Gyleview House, 3 Redheughs Rigg, Edinburgh, EH12 9HH. Copies of this leaflet and the Guide are also available on our website http://www.open.gov.uk/scotoff.

The new arrangements will ensure that

• less well-off students and their families continue to pay nothing towards tuition fees;
• parents from less well-off backgrounds continue to make no contribution to maintenance costs for their children;
• students from all backgrounds have access to loans on a fair basis;
• no student or parent has to face higher upfront costs than under the present system;
• contribution repaid by graduates/diplomates are fairer and easier to manage than at present, and will only be repaid as and when graduates are able to do so.

From 1998-99, new entrants to full time higher education will be assessed for a contribution of up to £1,000 a year towards tuition fees. The level of contribution will depend on family circumstances, and will be based on the current system of calculating eligibility for maintenance grants. Approximately 40% of students in higher and further education institutions will not be expected to make a contribution. Only students with an assessed parental or spouse income, after allowable deductions, of more than £26,000 will be expected to pay the full £1,000.

In the year 1998-99 only, new entrants to full time higher education will be eligible for both a maintenance award and a loan on the new repayment basis. The maximum maintenance award will be half that available in 1997-98, but students will be able to take out larger loans to bring up the total amount. Overall students will have access to a similar fund for maintenance as at present but with a higher proportion as a loan rather than a grant.

New students entering higher education in 1999-2000, will be entitled to loans only, set at a level to ensure that the funds previously available for maintenance under the existing system continue to be available under the new system. In this way, no student need suffer increased financial difficulties, and no parent is obliged to provide further support to their children.

An additional loan of £250 will be available for cases of financial hardship.

Students on a Scottish university or college degree course which is equivalent in educational terms to a university or college degree course elsewhere in the UK, and where the Scottish course is a year longer in length, will not be required to pay a tuition fee in the final year. It will be paid in full to the relevant university or college by the Government. This reflects the distinct school system in Scotland and the fact that many Scottish students enter university directly from fifth year.

Students on certain degree courses in health subjects will have access to Health Department bursaries in recognition of the importance to the health service of maintaining a skilled, professional workforce.

Students are clearly anxious to receive full and detailed information about their eligibility for loans, and their liability to pay tuition fees. To respond to this the Government has separately published a detailed guide to these points. This leaflet gives a summary.

Tuition Fees

The new arrangements include a means tested contribution of up to £1,000 towards tuition fees.

The eligibility for exemption from the £1,000 contribution to tuition fees will be based on the means testing arrangements currently used in assessing eligibility for maintenance grants. The contribution from a student will depend entirely on their parents‘ or spouse’s income. A mature students contribution will be assessed against the student’s own or spouse’s income.

Replacement of Maintenance Grants

The new arrangements will apply to all new students starting courses in 1998-99 and in subsequent years. Students starting in 1998-99 only, will have access in that year to the means tested maintenance grant at about a level of a half of the current grant. There will be a corresponding larger loan. From 1999-2000, grants will be entirely replaced by means-tested loans.

Income Contingent Loans

The new repayments system is much fairer to students than the current arrangements. Currently, graduates make monthly fixed mortgage style repayments over 5 or 7 years. Under the new arrangements graduates’ monthly contributions will be smaller, and their total borrowing will be repaid over a much longer period. Payments will vary according to graduates’ income, and on a monthly basis how much the graduate contributes will depend entirely on how much is earned. Until earnings reach £10,000 they will pay nothing.

MONTHLY CONTRIBUTION 1997-98 PRICES

The Government has made clear that no additional funding will be sought from parents or spouses, or from students during their studies. The Government is however looking to future graduates to repay a greater contribution of the costs of their higher education once they are accruing the financial benefits it brings. Research evidence suggests that graduates earn 20% more than non-graduates. This is a significant return on an investment part funded by the taxpayer. Employers recognise the benefits of higher education through higher salaries, and will in future contribute to the costs of higher education in this way.

Definition of New Students

The new arrangements will not apply to so called "gap year" students. The Government has already announced that those students who by 1 August 1997 had obtained a firm offer of a place at a university or college deferred until 1998-99, or a provisional offer subsequently confirmed, and who take up that place in 1998-99 will be eligible to the existing arrangements for student support. This will apply throughout their period as students.

The Government also has ensured that students who have commenced an HND course already and who would graduate from that course in the Summer of 1998 and then go on to a follow-on degree course in September/October 1998 will also maintain their eligibility for the existing system of grants and loans. Both of these exemptions from the new arrangements reflect the fact that such students will already have made commitments to higher education prior to the Government’s announcement. The Government believes it is fair that they should continue their university education on the same terms that they started it.

Fee Waiver

Scottish domiciled students undertaking an honours degree course at a Scottish university or college, which is comparable in educational terms to a degree course elsewhere in the UK and where the Scottish course is a year longer in length, will pay no more than a student studying elsewhere. The extra year in higher education is a consequence of the Scottish school system. This waiver ensures "equity" of treatment for Scottish students, as recommended by Sir Ron Garrick’s Scottish Committee of the National Committee of Inquiry into Higher Education.

For example a Scottish student choosing to study a four year honours degree in a Scottish HEI which is comparable to a three year course in most universities elsewhere in the UK will receive a fee waiver for the final year. Similarly a Scottish student studying for a five year honours degree in a Scottish university, which is comparable to a four year course elsewhere will receive a waiver. A waiver will be applied for the fourth year of a BEd or the final period of a concurrent teacher education course in Scotland PGCE students will also be exempt from the tuition fee proposals.

The annual tuition fee for all students on all higher education courses in Scotland in academic year 1998-99 will be £1,000. The fee will be paid by the Government for all continuing students and, at least in part, for most new students. Only around a quarter of Scottish students will pay the full £1,000. The Scottish Office will pay the full fee for all students it funds in the final year of courses longer than comparable courses elsewhere in the UK. The extra year in higher education is a consequence of the Scottish schools system. The same concession must also be given to students from EU countries. Students from England, Wales and Northern Ireland should be offered the option of direct entry into 2nd year and, if they accept it, will pay the same total fee as Scots or if they studied at a university elsewhere in the UK.

Medical Courses

Students entering degree courses in nursing and the professions allied to medicine in 1998-99 will not be required to pay tuition fees during their course and will have access to Health Department bursaries to help with living costs.

Similarly, special arrangements will apply to students entering medical and dental courses in 1998-99. There will be no requirement to pay tuition fees in years 5 and 6, and in these years Health Department bursaries will be available to help meet living costs.

The Government believe the proposed changes to student support are both necessary and fair. Without change it will be more difficult to sustain the current level of student numbers, and may rule out further increases. Graduates are the principal beneficiaries of higher education, and the Government believes it is to them, rather than just the taxpayer, that we should look for funding.

The proposals ensure:

• that we have a fair system of financial support for students
• that parent or spouses are not required to contribute any more than at present
• that longer Scottish Honours degrees are protected
• the students on long medical courses have added safeguards

This is the only fair way to maintain and further enhance our further and higher education systems.

WWW Page prepared by Graeme Ingram (EID Business Support Unit - 3 November 1997)