Miércoles 24 de Agosto de 2005, Ip nº 123

Government admits 15-year pay back on degrees
Por Polly Curtis

Graduates will take up to 15 years to pay off their student debts under the new system of top-up fees, government officials admitted yesterday.
The average student debt will soar by nearly a third to £15,000 and will take graduates a "likely repayment period of 13 to 15 years" after leaving higher education, they said.

Repayments for graduates on the average salary of £18,000 will be £5.20 a week - lower than for the present generation of student loans, but more than the 1p on income tax once proposed by the Liberal Democrats, which would mean £2.52 a week.

The admission came during a briefing session to journalists yesterday designed to explain the new funding system, which comes into force in 2006.

The average debt is now around £9,000 and the Institute of Fiscal Studies estimates that the period of time it takes to pay that amount is around seven years.

While tuition fees are increasing from around £1,200 a year to £3,000 for the vast majority of courses, the government believes the reintroduction of grants and the introduction of bursaries from universities will stop the poorest students being deterred from going to university.

All students will have the option of taking out loans to pay their fees and all students whose family or household income is less than £17,500 will be eligible for a grant of £2,700. Those from families or households earning less than £37,500 will be entitled to some of the grant. There will also be means-tested maintenance loans for all students. The maintenance and fees loans will be combined and paid back through the taxation system once the student earns more than £15,000. Loans will be paid back at a rate of 9% of their earnings above £15,000.

Students will also have to navigate their way through the bursaries and scholarships being offered by every university to attract students when they apply.

There have been widespread fears that the complexity of the scheme will leave students confused. The government has promised an information campaign with TV, radio and newspaper adverts to explain the new system and sell it to students and has got the backing of universities and the National Union of Students in doing so. The Department for Education and Skills is now considering the first range of proposals for those adverts, which are due to launch in the autumn and run through the application period next year.

A department spokesman said:"The estimated debt and pay back period are not new figures - they were included in a discussion paper published by the government in December 2003, which considered student debt in some detail and informed debate of thethen higher education bill. The new system actually avoids graduates being saddled with unmanageable debts. People pay back their loans at an affordable rate that is linked to their income and only once they are earning more than £15,000.Higher education is likely to be the best investment ever made and the new system makes it more accessible than ever before."


  04/08/2005. The Guardian.