Student Finance

Part of Bill Presented – in the House of Commons at 8:53 pm on 22 February 1995.

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Photo of Mr Mike Watson Mr Mike Watson , Glasgow Central 8:53, 22 February 1995

I am sorry, but I cannot give way because of the restriction on time.

The total cost of the mature students' allowance, aside from the administrative costs, which Ministers have told me they cannot calculate, is £34 million to £35 million a year. That will be the saving when it is abolished. We should put that in the context of the total education budget. The sum barely ripples the water. Clearly, the reason for doing away with the older student's allowance is to save money.

All the evidence we can assemble shows that mature students in higher education have greater financial difficulty and suffer much heavier debt than their younger counterparts. We have recognised for some time that students over the age of 26, particularly those coming from employment, have difficulty in making the transition from a wage to a student income. In many cases, mature students are giving up a job in the hope of ultimately bettering themselves and their employment opportunities through achieving a degree.

Since 1989, the number of mature students has increased. They now form 17 per cent. of students in higher education. I can hazard only a guess as to what that figure will be five years from now. I suspect that it will dramatically decrease. The abolition of the older student's allowance is a regressive step that can be only a disincentive to people hoping to enter higher education.

An even greater injustice is being done to people hoping to enter education this year through the older students' allowance. They applied in good faith before December last year and in the belief that they would receive the allowance. The Government have turned around to them and said, "We gave you that guarantee, but we changed the rules of the game after the game was in progress." The applications are in and a number of potential students are caught in that trap. Whatever the merits, and I cannot see any, of the proposal, it is entirely unjust that people who applied in good faith will not receive the allowance.

Another aspect of concern involves home students aged over 50. Such students are not even eligible for a student loan. Anyone entering higher education at the age of 50 will be especially badly affected. I hope that, if he does reply, the Minister will give some consideration to the people caught in that trap.

I have tried to get some rationale for the cut—I got none from the Minister in his speech. The proposal is clearly an attempt to save money, albeit a relatively small amount. I managed to find two answers that he gave in December last year to questions on the savings that would arise. In one, he said that this was an additional allowance which was not targeted at any specific maintenance requirement that a student might have. As I have tried to demonstrate, that is not true. First, the older student's allowance is means-tested; and, secondly, older students tend to have extra commitments such as families and mortgages, which younger students do not have. The National Union of Students survey on value for money found that the total average debt for students aged over 26 was £6,105. That compares with an average total debt of about £2,500 for those in the 17 to 21 age bracket.

I throw back at the Minister the fact that, when we started studying, our generation did not leave university with a debt around our necks and the burden of having to pay that off. The main problem for us was finding a job. Of course, that problem still exists, but hanging over the heads of graduates now is the fact that if they get a job that earns them more than £14,000 a year—not a massive salary these days—they have to start paying back the debt. We must appreciate that students over the age of 26 have additional burdens over and above the loans which, if they want to go into higher education, they will be forced to take.

The Minister also said in that parliamentary answer that, because of the continuing pressures on public spending, extra support could not be justified. He is saying that £35 million throughout the United Kingdom cannot be justified. The hon. Member for Castle Point (Dr. Spink) may grin and think this is funny, but I wonder how many of his constituents will ask him how he voted when the mandatory regulations were discussed on 22 February. I hope that he will be able to say to them, "Yes, I voted to abolish them because I think that that is in your best interests."

The regulations cannot possibly be in his constituents' best interests. The implications are clearly more important for the public sector borrowing requirement than for the future of education, yet they involve minimal savings.