Student Finance

Oral Answers to Questions — Education and Skills – in the House of Commons at 10:30 am on 12th October 2006.

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Photo of Stephen Hepburn Stephen Hepburn Labour, Jarrow 10:30 am, 12th October 2006

What assessment he has made of the administration of student loans; and if he will make a statement.

Photo of Bill Rammell Bill Rammell Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills

We have reviewed how students in England can obtain financial support for their studies in higher education. From September 2008, we will phase in a new service which will be mainly online and which will bring together applying for a place and applying for financial support. We will also change the Student Loans Company so that it is a national delivery organisation and further improve the collection of repayments through the income tax system.

Photo of Stephen Hepburn Stephen Hepburn Labour, Jarrow

The Minister will be aware that South Tyneside is part of the pilot scheme for student loans. Let me tell him that it is an absolute mess. Young people have not been paid yet, they and their parents are having to go into debt and they are having to consider whether to take up their university courses because they cannot afford the fees. There needs to be an investigation, compensation and a solution. The solution is to give it back to the councils, who did not make a mess of it, so that student loans do not become another debacle like the Child Support Agency or tax credits.

Photo of Bill Rammell Bill Rammell Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills

I take my hon. Friend's concerns seriously. We are introducing these reforms partly because there was too much variability in performance on the part of local authorities in the administration of the student loans scheme. However, knowing of his interest in the issue, I have looked into it and spoken to the Student Loans Company, which told me that, in South Tyneside, of the 2,100 applications, all but 40—fewer than 2 per cent.—have been paid on time at the start of the new academic year. Of those 40, some were made very recently and others may have been paid part of their loan while the SLC is awaiting further information. Whatever the explanation, we need to get to the bottom of it. Contingency arrangements are in place, and I will work with my hon. Friend to ensure that the situation is sorted out.

Photo of James Gray James Gray Conservative, North Wiltshire

It is good to hear that the Minister is going to work with his hon. Friend to get the shambles of the Student Loans Company sorted out. Does he agree that one of the most important parts of student loans administration is the repayment of teachers' loans scheme? Is he aware that there is a two-and-a-half to three-year delay in producing statements for constituents such as Mr. Chris Dutton of Chippenham, who asked as long ago as June 2005 for a statement of when his loan would be repaid? To date, he still has not got it. Today, the chief executive of the SLC told me that he hoped to get it sorted out by the end of the year. That is not good enough, and the Secretary of State needs to get this shambles sorted.

Photo of Bill Rammell Bill Rammell Minister of State (Lifelong Learning, Further and Higher Education), Department for Education and Skills

If the hon. Gentleman gives me the details of that case, I will ensure that it is dealt with quickly. I do not believe that we are dealing with a chaotic system or a shambles. However, there are difficulties—that is why we have conducted a very thorough and rigorous end-to-end review. We are consulting to get this absolutely right. The reforms that I set out earlier are the way forward to ensuring that we have a nationally uniform system that works in the interests of students.

J

The Minister is sorely deluded if he does not think that the Student Loans Company is a shambles. I have been attempting to get an up to date statement from them since 2004. They kept insisting that there were "difficulties" in transferring to some new computer system - or that HMRC had not given...

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