LIST OF CONCLUSIONS AND RECOMMENDATIONS
Students' paid and unpaid work
1. The proposal from the Institute of Public
Policy Research that voluntary work by students could be linked
to fee credits should be considered seriously in the Government's
review (paragraph 25).
2. We recommend that in its review of student
support the Government should pay particular attention to the
needs of a significant group of students who may be unable to
work (paragraph 26).
3. We believe that the present methods of identifying
students from more deprived backgrounds are underdeveloped and
we call upon the Department for Education and Skills to refine
their methods and to learn from private sector methodology in
order to improve the precision of targeting (paragraph 32).
4. We believe that the present 'post-code premium'
of 10 per cent is still too low and urgent consideration should
be given to a higher rate, reflecting the true costs of recruiting
and supporting students from disadvantaged backgrounds (paragraph
The Dearing Report
5. It is our view that many of the problems
encountered in the present system of student finance originate
from a failure by the Government clearly in public to debate the
essential elements of the Dearing proposals and the reason for
its recommendations and a fear of alienating key elements of the
electorate (paragraph 37).
6. We do not recommend the adoption of the
Scottish system for England (paragraph 43).
7. We were not persuaded to recommend the adoption
of the Welsh approach for England (paragraph 45).
8. We recommend that the Department should
make careful appraisals of the Scottish and Welsh higher education
funding initiatives (paragraph 46).
Increasing participation and financial support
9. We support the growth and development of
a society that values lifelong learning and encourages participation
in learning by all, including those in the Government's target
group. While the development of an effective student support strategy
will be an important contribution to this objective, there is
much else to be done, including raising aspirations and achievement
in schools and developing parity of esteem for vocational, professional
and academic learning (paragraph 55).
10. We believe that in the context of the Government's
participation target for higher education, and the evident under-representation
of students from low income homes, it is essential that a seamless
system of financial support should be introduced that will encourage
poor or otherwise disadvantaged students to continue their studies
through further education and into higher education (paragraph
The balance between individual and state contributions
11. During the course of our inquiry we have
become convinced that while income-contingent loans may, in principle,
be an effective means of sharing the cost of student support between
individual beneficiaries and wider society, the scale of the current
interest subsidy, combined with the blanket entitlement of all
students to 75 per cent of the full loan, channels subsidy to
those who do not need it as well as to those who do (paragraph
12. We recommend that the Government should
retain a system of contributions to the costs of tuition and that
the Government should keep under continuous review not only whether
the maximum means-tested contribution should be increased but
also whether the thresholds for means-testing of contributions
should be altered (paragraph 62).
Public concern or public misunderstanding?
13. We can expect little progress in terms
of social inclusion unless the Government is able to communicate
more effectively to students and families what the policy will
mean to them in practical terms (paragraph 65).
14. Critically, the information for current
and prospective students must convey the notion that while a good
quality education may require financial sacrifices, it is an investment
that is usually worth making (paragraph 66).
The costs of student living
15. We recommend that the maximum loan available
should be set at a level that reflects the realistic costs of
pursuing a full-time course of study (paragraph 68).
The student support review
16. We expect that the current review of student
support will thoroughly explore every possible model for support
and offer an in-depth analysis of their advantages and disadvantages
17. We believe that the current system of student
support has failed in three important respects. It has not made
a significant impact on the social profile of entrants to higher
education; it is not clear and easily understood by target populations,
and it has not delivered a progressive and socially equitable
means of supporting students in higher education (paragraph 74).
Interest rate subsidy
18. We recommend that the Government's borrowing
costs should be recognised explicitly in the student support review
and in future accounting practices (paragraph 77).
19. We are yet to be convinced that the Government's
concerns regarding domestic and European consumer credit legislation
are likely to be a significant issue in the development of future
policy and we urge the Department to look into this matter further
20. It is clear to us that the current zero
real interest rate for student loans subsidises those from affluent
backgrounds while providing insufficient funds to those from poor
or otherwise disadvantaged circumstances (paragraph 83).
21. It is our view that there is considerable
scope for development of models of student support which are based
on adjustable interest rates. Such models would enable fine tuning
according to prevailing economic conditions or policy in relation
to particular groups or subject areas (paragraph 84).
Extension of Education Maintenance Allowances
22. We recommend that the Government should
thoroughly explore the costs and implications of a seamless support
system, based on the EMA model, spanning further and higher education,
to underpin this progression. Such support should continue at
least as far as the conclusion of the first year of a full-time
higher education course, and should include those between 19 and
24 studying full-time for an initial level 2 [equivalent to five
or more GCSEs at A* to C] qualification (paragraph 97).
Loan repayment threshold
23. We recommend that the repayment threshold
for student loans should be raised significantly closer to the
level of average earnings and should keep pace with changes in
the level of average earnings (paragraph 101).
Funding for universities
24. The funding of institutions is a matter
of grave concern and we are clear that any additional resource
for student support should not be at the cost of investment in
institutional infrastructure (paragraph 102).
Refined income-contingent loans with reduced subsidy
25. We have been disappointed in the Government's
dismissal of the Barr and Crawford proposals. In our view they
provide a challenging critique of the current system and present
an innovative approach to student support policy. We were therefore
astonished to discover that neither Professor Barr or Mr Crawford
have been invited to meet with the review team and discuss their
proposals in detail. We urge the Department to correct this omission
at the earliest opportunity (paragraph 108).
26. Much heat and little light has so far been
shed on the top-up fees debate. There is a serious debate to be
had on fees policy and the Government should not shrink from evaluating
the costs and benefits of a differentiated fees strategy (paragraph
Tiered interest rates
27. It is our view that the proposal to reduce
the interest rate subsidy for those who do not need it and the
intention to expand take-up of further and higher education are
not irreconcilable positions and that the Government should be
encouraged to develop innovative and potentially radical solutions
to this challenge, without introducing excessive degrees of complexity
28. The Department should give consideration
to renaming the hardship fund. The language of hardship
conveys an unfortunate stigma and we are concerned that it may
discourage some students from making an application. Reforms to
streamline and simplify the administration of such funds are urgently
needed to give greater certainty to vulnerable students or those
in difficult circumstances that timely and effective assistance
will be provided to help them successfully to achieve their potential
in higher education (paragraph 120).
Exploration of alternative models
29. We expect the findings of the Government
review, and the full and detailed arguments they balanced on each
of the options they considered, to be published (paragraph 121).
Effective promotion and communication
30. We encourage the Government to explore
innovative communication and advertising methods to ensure that
the affordability message is effectively conveyed to target communities
31. We recommend that the Government should
continue to conduct research on the impact of the current student
support regime as it affects student choices in terms of subject,
institution, career path and patterns of study together with the
impact of debt on graduates (paragraph 123).
32. In oral evidence Margaret Hodge offered
the following comment on the student support review: " If
we do not get it right, we will pay a heavy price, not tomorrow
but five or ten years down the line". We concur with this
view, commend the Government on its decision to undertake a substantial
review, and trust that the outcomes of the review will take fully
into account the considerations in this Report (paragraph 127).