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Student support: restricted modification of repayment terms

Part of Oral Answers to Questions — Work and Pensions – in the House of Commons at 6:00 pm on 21st November 2016.

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Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons, Chair, Commons Reference Group on Representation and Inclusion Committee 6:00 pm, 21st November 2016

With this it will be convenient to discuss the following:

New clause 3—Student loans: regulation—

“(1) Any loan granted under section 22(1) of the Teaching and Higher Education Act 1998, (“student loans”) irrespective of the date on which the loan was granted, shall be regulated by the Financial Conduct Authority.

(2) Any person responsible for arranging, administering or managing, or offering or agreeing to manage, student loans shall be regulated by the Financial Conduct Authority.”

New clause 5—Revocation of the Education (Student Support) (Amendment) Regulations 2015—

“The Education (Student Support) (Amendment) Regulations 2015 (Statutory Instrument No. 1951/ 2015) are revoked.”

This new clause would revoke the Education (Student Support) (Amendment) Regulations 2015, which moved support for students from a system of maintenance grants to loans.

New clause 6—Higher Education loans: restrictions on modification of repayment conditions—

“(1) A loan made by the Secretary of State to eligible students in connection with their undertaking a higher education course or further education course under the Teaching and Higher Education Act 1998 shall—

(a) not be subject to changes in repayment conditions retroactively without agreement from both Houses of Parliament;

(b) not be subject to changes in repayment conditions in the event of the loan being sold to private concerns, unless these changes are made to all loans, in the manner prescribed above;

(c) be subject to beneficial changes, principally to the repayment threshold, in line with average earnings.

(2) In section 8 of the Sale of Student Loans Act 2008, for subsection (1) substitute—

‘(1) Loans made in accordance with regulations under section 22 of the Teaching and Higher Education Act 1998 (c. 30) are to be regulated by the Consumer Credit Act 1974 (c. 39).’”

This new clause would ensure no retroactive changes could be made to student loan repayment conditions without agreement from both Houses of Parliament.

New clause 8—Access to support for students recognised as needing protection—

“(1) Within six months from the day on which this Act comes into force, the Secretary of State must, by regulations made under the Higher Education Act 2004 and the Teaching and Higher Education Act 1998,make provision for financial support for higher education courses offered to students with certain immigration statuses.

(2) The regulations specified in sub-section (1) must include, but shall not be restricted to—

(a) provision for persons who have been brought to the UK under the Syrian Vulnerable Persons Relocation Scheme, or any equivalent scheme, and their family members to access student loans on the same basis as refugees recognised in-country, and

(b) provision for persons who have claimed asylum and been granted a form of leave to remain in the UK to be eligible for—

(i) home fees for a higher education course if they have been ordinarily resident in the United Kingdom and Islands since being granted leave, and

(ii) student loans for a higher education course, if—

(a) they have been ordinarily resident in the United Kingdom and Islands since being granted leave, and

(b) are ordinarily resident in the United Kingdom and Islands on the first day of the first academic term of that course.

(3) In this section—

‘home fees’ means fees for a higher education course charged to persons considered as ‘qualifying persons’ under regulations made under the Higher Education Act 2004;

‘student loans’ means loans made to students in connection with their undertaking of a higher education course under the Teaching and Higher Education Act 1998.”

This new clause would allow all refugees resettled to the UK, as well as people seeking asylum granted forms of leave other than refugee status, to access student finance and home fees.

New clause 10—Student support: requirement to assess repayment terms—

“(1) The Teaching and Higher Education Act 1998 is amended as follows.

(2) In Section 22 (new arrangements for giving financial support to students)—

(a) in subsection (3)(b), after “and” insert “subject to subsection (3A)”

(b) after subsection (3) insert—

‘(3A) Regulations under subsection (3)(b) must include a level of earnings below which a person shall not be required to make repayments of such a loan.’

(3) After Section 22 insert—

‘(22A) Duty to assess consumer prices in determining terms for loan repayments

(1) In relation to regulations made under section 22(3A) the Secretary of State must, for each tax year, review UK consumer price inflation for the period since the last review under this sub-section.

(2) If the review concludes that consumer prices for the previous tax year have increased, the Secretary of State shall, by order, amend the level of earnings specified in regulations made under sub-section 22(3A) by the same percentage increase as consumer price inflation determined under sub-section (1).

(3) If the Secretary of State is not required to make an order under this section, the Secretary of State shall lay before each House of Parliament a report explaining the reasons for arriving at that determination.

(4) For the purpose of this section—

‘consumer prices’ means the Consumer Price Index;

‘consumer price inflation’ refers to the annual assessment made by the Office for National Statistics in the UK consumer price inflation Statistical bulletin.’”

Government amendments 14 to 16 and 20.