Reforms to support for students in higher education - statement by John Denham, The Secretary of State for Innovation, Universities and Skills
With permission, Mr Speaker, I wish to make a statement on reforms to support for students in higher education.
I am delighted to make my first statement as the first Secretary of State for Innovation, Universities and Skills. In establishing my department, my Rt Hon Friend the Prime Minister charged my colleagues and I with the twin aims of providing a strong integrated permanent voice across Government for effective investment in research, science and skills at all levels and ensuring that research, higher education and further education serve their wider purposes; supporting social mobility and inclusion for the disadvantaged, and cultural growth.
Success in Higher Education will be one key measure of my department’s work. The skills and talents of our people are our greatest natural asset. Our universities and colleges must offer world-class standards of teaching and research.
Since 1997 the number of home and overseas students has increased by over 400,000. The funding on higher education institutions has risen by over 20% in real terms. Before 1997, funding per student had declined by 36% in less than a decade.
But in today’s global economy we cannot afford to stand still. The growth in the number of graduates being produced in India and China is dramatic. Around the world, countries are increasingly investing in the high level skills and the cutting edge research that universities provide. To compete and prosper in this world, to respond to the needs of leading global and national businesses, we must enable many thousands more people to study and graduate each year. To become a world leader in skills, as Lord Leitch recommended, we must aim for at least 40% of adults to have higher level qualifications by 2020.
And, Mr Speaker, everyone who has the potential and qualifications to succeed in higher education, whatever their family background, should have the opportunity to participate. No one should be held back from realising their potential. That is fair, and it is right for our economy.
We cannot be satisfied when only 28% of students come from low income backgrounds. We are wasting the talents of too many young people for whom university study should be a realistic ambition, not out of reach.
And we recognise too that hard working families on modest incomes have concerns about the affordability of university study. They have high aspirations, and rightly so. We should help them fulfil those aspirations.
So to meet the challenges of achieving world class skills, and to make the most of the talent and ability of every individual we need to be willing to change. That is why, today, I propose four major changes to our system of student support.
First, we will increase substantially the number of students entitled to maintenance grants. These changes will take effect for students from England entering higher education in 2008.
More students will receive full grants worth £2,825.
From September next year, full grants will be available to new students from families with incomes of up to £25,000, compared to £17,500 in the current academic year.
We estimate that 50,000 more students each year will receive full grants once the system is fully up and running.
With the addition of £310 bursaries from higher education institutions, these students will be guaranteed £3,145 a year.
Eligibility for maintenance grants will also be extended to many more students from families on modest and middle incomes. Hardworking families who are doing the right thing by encouraging their children to go to university.
Students whose families have household incomes of up to £60,000 a year will in future benefit from eligibility for a grant. More than 100,000 extra students at any one time will be entitled to a partial grant once these proposals are fully implemented.
Over 250,000 students will gain from our proposals once fully implemented. Of these 35,000 will gain more than a £1000 a year and a further 125,000 by more than £500.
For a student from a household on £25,000 a year earnings, this will mean an extra £1,100 a year in maintenance grant. For a family on £50,000 a year with two children at university, it will mean that each student receives a grant of £560 a year.
Mr Speaker, today, just over half of students who entered HE in 2006 received a maintenance grant. From 2008, two thirds will do so.
- a third of students will get a full grant, compared to 29% now;
- and a further third will get a partial grant, compared to 22% now.
To fund this improvement and the other measures that I am announcing today we will be investing over £400m a year when the system is fully in place. This is a major increase in support to students.
Second, able young people from low income homes should aim for university, confident of the financial support they will receive.
From the 2008/09 academic year, a 16 year old who qualifies for an Educational Maintenance Award will be guaranteed a minimum level of maintenance support at university.
This 16 year old will be guaranteed at least five years of maintenance support for their studies – through school, college and university.
The guarantee will support aspirations for higher education. It will provide certainty about the financial support to fulfill their potential.
Young people starting their studies at sixth form or college will see a clear route into higher education.
Over 250,000 16 year olds a year will get the guarantee.
Of course in developing this package I will work closely with my Rt Honorable Friend the Secretary of State for Department for Children, Schools and Families to ensure that support goes to those students who are qualified and demonstrate their rigorous compliance with the system.
Third, Mr Speaker for students whose parents have not attended university, the support of others can be crucial in deciding to go to university.
We want to give new emphasis to students acting as role models and mentors for young people who might not otherwise go on to higher education.
So I propose to double the number of such mentors on our popular and successful Student Associate Scheme from 7,500 to 15,000.
One generation of students supporting the next generation of children towards college or university.
And finally Mr Speaker, we also want to offer graduates more choice over the repayment of their loans. Students starting in 2008 will have this option once they complete their degree.
When graduates face significant new outgoings in their lives – such as buying their first home or starting a family – they will have the option of taking a break from their loan repayments. They will be able to take a break of one year, or two, or longer – for up to five years. This would help graduates make flexible choices over their finances at key points in their lives and careers.
Mr Speaker, over the next three years, these reforms will help us meet growing aspirations for higher education, within the CSR settlement and allowing us to meet commitments we have already made. The proportion of 18 to 30 year olds going on to higher learning will continue to rise. And universities will receive the same level of funding for teaching each student, in real terms – so that excellence in teaching and learning can be maintained.
Mr Speaker, these reforms promote aspiration, offer opportunity and provide support to students from hard working families; they promote the world class standards of our colleges and universities, and they help deliver the skills and knowledge that business and society needs in a global economy. I commend them to the House.