Education Bill

We beg to differ on that. Actually, I agree on the essence—that a lot of what has been raised today needs to be discussed in a wider context. It is a great pity that we are not able to do that because of the strange way in which the Government have been developing policy in this area. We had an announcement about the funding system detached from the student loan system which is in this Bill. We had a White Paper at the very end of the previous Session but we do not yet know when the Bill that will follow is due, and we are therefore not able to tie all these things together. That is the point I was trying to make. I do not think we disagree in principle on what any Government would have to do in these situations. We want to fund our universities to the best level possible and we accept the principle that those who benefit from that should contribute to it. The problem is that I do not think the system that is coming out is the right one. The noble Lords, Lord Foulkes and Lord Knight, put a fairly precise finger on the first of my questions, about the difference between RPI and CPI, and I am afraid that I did not think that the answer that the Government came up with was at all credible. We will need to return to this at Report. On the social inclusion points, I heard the Minister and I admire her aspirations. However, I think that there will be severe problems for women, particularly those in lower-paid occupations, and for mature students. Although I understand that negotiations are continuing about Sharia law compliance, I am worried about this and I hope it will be taken back and discussed seriously. If it turns out this is not a Sharia-compliant issue or is sufficiently close to problems that will cause the Government to reflect on it, we perhaps need an early decision; we are moving quite fast with this Bill and it would be difficult to change it later on, even this month. On the question of why 3 per cent, I do not think that the Minister gave us much; 2.2 per cent from 3 per cent may not sound a lot but it would make a huge difference in terms of whether loans are keeping pace in value or are increasing in an overall race to the bottom. On the question of the student loan sell-off, there is more to make of this, and we will need to return to it because I think it is driving some of the policy here. Unless we can get an absolutely clear answer on that, we will have to return to it. However, this is Committee and we have had a very good discussion so I beg leave to withdraw the amendment. Amendment 145F withdrawn. Clause 72 agreed. Clause 73 : Limit on student fees: part-time courses Amendment 145G Clause 73 : Limit on student fees: part-time courses Amendment 145G Moved by Moved by Lord Stevenson of Balmacara "145G: Clause 73, page 56, line 26, at end insert—""““( ) Notwithstanding the above, student fees for part-time courses must not exceed £1,000 per annum.””" Lord Stevenson of Balmacara: My Lords, I am moving Amendment 145G and I shall also speak to Amendment 148 in the name of the noble Baronesses, Lady Brinton and Lady Sharp of Guildford, which we support. The noble Lord, Lord Browne, in his review, and the coalition Government in their agreement, strongly supported the need to improve provision for part-time students and to assist the institutions that teach them. So far, so good. So you would think that the Government would therefore agree with one of the main aims of the Browne review, which was to abolish the arbitrary distinction between full-time and part-time study. Unfortunately, the Government’s announcement that from 2012 the system of loans they are introducing for full-time students will be extended to part-time students does not create parity. Indeed, it is going to wreak havoc in this sector. The amendment in my name is a probing amendment, but if it were accepted it would effectively extend the status quo. At any rate, it allows me to set out some questions for the Minister. Amendment 148 makes some detailed proposals on the same topic, and I look forward to hearing the noble Baroness reply. Part of the problem is that the Government’s proposals do not seem to have caught up with the way part-time courses are now operated in the UK. Part-time undergraduate provision is very different from full-time undergraduate provision. 40 per cent of students in the UK studying at undergraduate level study part-time. Part-time students do not apply through UCAS; they apply directly to the university of their choice. Part-time applicants often apply very late in the cycle: typically, half of part-time applications are received in the three months before the autumn term starts. This, of course, is not lack of planning—it can typically take part-time students two or three years to move from first inquiry to application—but it is the necessary caution of mature students waiting to see if work, family and money issues make it possible to study. I would like, at this stage, to declare a past interest, in that I studied part-time for a professional accountancy qualification by attending evening classes while working full-time, so I know the sort of pressures that that generates. It took me about three years and a couple of false starts to get going and then it took me six years to complete my course. A six-year commitment is not one you undertake without considerable reflection and thought. Part-time students are mostly not in school or college when they apply, so frequently they apply unsupported and without detailed knowledge of the system. They are less likely to have traditional qualifications, such as A-levels. They rely heavily on the university they apply to for information, advice, guidance, support and, perhaps most important of all, confidence. Part-time students are more likely to come from the most non-traditional and hard-to-reach groups. They are often not geographically mobile and so usually apply only to one local university. I am grateful to Birkbeck College which gave me the following information about its current student cohort, which is, I think, very interesting. The college, as I am sure many noble Lords will know, has 20,000 students, with a very small minority of these on full-time courses, and the rest studying part-time. The majority of these—75 per cent—combine their studies with work. Some 50 per cent work full-time alongside their studies. The college recently carried out a survey of its year students, and some of the headline results are that the majority of part-time students are women—64 per cent at Birkbeck—and the majority are aged over 30. The majority of students stated that they could not afford to give up work, which means that, for most students, the alternative to part-time study is not full-time study, but not studying at all. Career development and personal development were stated as the main motivations for studying and compensating for having missed out earlier in life was also stated as a reason by a significant number of respondents. As part-time fees are currently unregulated, each institution can set its own fees. Birkbeck College tells me that for entry in 2011 the fee range is £2,478 to £3,090. Those courses which have additional costs—laboratory work or field trips—or with high student demand or strong career outcomes, such as financial courses, fall into the higher tiers; it is really a market-led solution. Part-time students are not confined to part-time provider institutions, such as the Open University or Birkbeck. In many modern universities, over a third of students study on a part-time or a flexible basis. In the modern universities, both part-time and full-time study is based on modules and credits. There are 120 credits in an academic year. Under the Bill, part-time course grants will be removed and part-time students will be entitled to fee loans—but not maintenance loans—if they study at 25 per cent intensity or more per annum. Presumably, that means more than 30 credits in a year. Part-time student fee loans will have the same conditions attached to them as for full-time students, but only for three and a half years of study. In other words, loans will attract RPI plus interest at 3 per cent. Thereafter, part-time students whose earnings rise above the earnings threshold of £21,000 will be required to start repaying loans at RPI plus 3 per cent of earnings. Part-time students will therefore be subject to different repayment regimes compared to their full-time peers. So there is not much parity there. Many universities have adopted a single fee of £9,000 for the 120 credits required for a full-time course. Others will be choosing fees, for example, of £6,000 for 120 credits. The current proposal will mean that there could be a different price per credit depending on whether individuals studied full-time or part-time at the same institution for the same course. This can only invite perverse behaviour. The Bill proposes to give the Secretary of State the power to specify in regulations the maximum tuition fee that higher education institutions may charge part-time undergraduate students in a given year. There is a query about what these figures are. The upper fee amount is now specified as £6,750. The lower fee amount has been given as £4,500. In fact, we now know the detailed regulations for this. I do not think many people on the Committee will know this, but the student support statutory instruments 2011 were tabled in Parliament on 9 August 2011 and came into force on 4 September 2011—slightly odd to do that in the deepest Recess. I would like to quote them: "““The amount of a fee loan in respect of an academic year of a designated part-time course must not exceed the lesser of (a) the fees payable by the student in connection with that year; and (b) the maximum amount. For the purposes of this regulation, the ““maximum amount”” means £6,750 where the current part-time course is provided by a publicly funded institution, and £4,500 where the current part-time course is provided by a private institution, other than on behalf of a publicly funded institution””." I wonder whether the Minister could explain a little more about this and give us some context. Why is that particular figure of £4,500 based on an ostensible private provider, and what relevance has that got to the normal vision of part-time courses in the country? Can the Minister also confirm that this means in practice that the same fee levels as for a full-time student will apply but on a pro rata basis, and that while it will be for each institution to set their own fee levels, loans for part-time students can only be available up to 75% of the maximum full-time loan, namely £6,750? If that is correct, then I deduce that the situation is that part-time fees are set to go up from about £1,000 per annum—these are Department for Education figures—to £6,750. Part-time students will not be eligible for maintenance loans or grants as they have been in the past, but such students will in future have to borrow to pay the much higher fees that they are going to be charged. That seems a bit like Alice in Wonderland. This may be of benefit for the institutions, who will clearly benefit from the additional cash, but for many part-time students, particularly those who already have significant borrowing or other financial commitments, this does not seem to be a good deal. So my questions for the Minister are: why are they introducing a different approach for part-time students to that for full-time students? If the university is setting a fee which they think the market will bear, and the Government are prepared to extend the voucher system to part-time students, why cap these loans at 75% of the maximum for full-time courses? The intention is that students on full-time courses become liable to repay their loans the April after they finish or leave their course. So with a full-time course of three years, you are eligible to repay 3.5 years after you start that course. Comparable part-time undergraduate degrees obviously take longer than full-time—in many cases four or five years, in my case six years. But for part-time loans the Government have proposed that repayments must commence 3.5 years after the loan is taken out. This means that part-time students will begin to repay their loans while they are still studying. In some cases, they could be repaying their loan for nearly two years while they are still studying. Full-time students only repay when they have completed their studies. Surely the Minister would agree that it is logical and fair for all students to start repayment of loans six months after they have finished or leave the course, thus allowing the student to benefit from an improved job or salary before being asked to pay the loan. The former Minister, the noble Lord, Lord Henley, kindly wrote to me and other noble Lords about this group of amendments. He says that the 3.5 year repayment due date is, "““consistent with the current average time when full-time borrowers studying a three year degree course reach their repayment date””." Consistent? Such sophistry demeans the case. Surely the consistency we want is around the point when you complete the course. If full-time students have the opportunity to complete their studies before they have to start repaying the loan, why on earth is this logic not also applied to part-time students? In his letter, the noble Lord also makes the point that if the repayment date were delayed by a year or more, students may accrue more interest, as that period could be charged at RPI plus 3 per cent. Well, we knew that, and the Committee will know from the previous amendment that I would not have started from here in this discussion. In any case, this hardly outweighs the absurdity of a part-time student having to repay a loan before benefiting from the course for which he or she has taken out the loan in the first place. Can the Minister confirm that loans will not be available to part-time students who are studying for an equivalent or lower qualification than the one they already hold? Many students may be studying to change career, or acquire skills in an area they are currently working in, which may be unrelated to their previous qualification. In fact—if I can again plead my case—when I was considering taking a course, I already held a degree in chemistry, but I wanted to requalify as an accountant, as that was more relevant to my then job as an administrator. Under these rules, I would not have been eligible for a loan. If the intention of the scheme is to improve the quality of the workforce in the UK by encouraging study and training, why are you putting barriers in the way of those who want to train for gain? Can the Minister explain why such students are being excluded from access to the scheme? I believe that the proposals for part-time students in the Bill are not fair, and will not achieve the aspirations of either the Browne report or indeed the coalition agreement. There surely ought to be much more parity between full-time and part-time provision, while reflecting the very different circumstances of those who study part-time. In particular, the concept of students borrowing to pay their fees in the latter stages of courses, while at the same time being asked to repay the loans they have already taken out for the earlier years, is not only completely daft, but has the feel of a Ponzi scheme. What is proposed in this clause simply does not seem to help those students who take part-time courses for career development, or as compensation for having missed out earlier in life. I hope it is not too late for the Government to think again. I beg to move.