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Sale of Student Loans Bill

It has been my duty on behalf of my party to carry the baton round the final lap of the debates on the Bill. I missed its Second Reading and Committee stage because I had a different responsibility at the time. I thank my hon. Friend the Member for Brent, East (Sarah Teather) for her work during the earlier stages of the Bill. We have had a good discussion involving lawyers, accountants, business men and Back Benchers being mildly critical of their Government. We have also had an interesting discussion about the effect on balance sheet accounting of ““shall”” rather than ““may””. It is a shame that we must now leave it to the other place to sort out an acceptable wording. Throughout, we have all been trying to achieve safeguards for students, value for money for the taxpayer, and transparency. This is a small and technical Bill, but it involves a huge amount of money for the Government. It raises in excess of £6 billion to be allocated over the current comprehensive spending review period, so it could release £2 billion a year. I hope that higher education might see the lion's share of that significant injection into the Treasury's coffers. The Government have made significant investment, in some cases through off balance sheet financing, in the secondary school and further education estates, but there is an opportunity also to make further investment in the higher education estate, where some of the teaching facilities are perhaps not as good as youngsters now leaving school and college are accustomed to in their pre-18 learning experience. Higher education needs the investment to ensure that its teaching facilities match their expectations. Debt is a very significant area of concern for students, as the hon. Member for South Holland and The Deepings (Mr. Hayes) rightly said, and that is reflected in the most recent attitude report, ““The Student Experience Report 2007”” put together by UNITE, the national private sector provider of accommodation that has its headquarters in Bristol. It showed that 74 per cent. of students currently have their borrowings from the Student Loans Company, but many of them have to take out secondary sources of finance as well, such that 41 per cent. also have a bank overdraft, 16 per cent. have outstanding credit card loans, 7 per cent. have a personal loan, and many others have second credit cards or store cards, or finance their university living expenses through unpaid utility bills. Part of the problem is that the maximum amount by which students can benefit from the Student Loans Company is set at an unrealistic level. I was staggered to find that to live in my choice of hall of residence, or any other hall of residence, at Bristol university today would require the vast majority of the maximum amount that the Government would allow me to borrow on cheap credit terms from the Student Loans Company, leaving me with only about £200 to buy my weekday lunches and to finance the purchasing of textbooks and the refreshments that are an essential part of the student living experience. We need a fundamental review of how students' living costs are financed for the three years or more that they are undergraduates at university. The UNITE report showed that 38 per cent. of students who were first-years last year, when the report was put together, were already seriously concerned about their levels of debt. Serious research needs to be done about the fear of debt, which is even greater among students from lower socio-economic backgrounds, and the effect that it has on drop-out rates in higher education. The Government are to have a full-scale review of the financing of higher education next year, and I hope that that review will include a serious look at how students finance themselves through higher education, so that we can ensure that the burden of debt does not drive people out of it and undermine the Government's otherwise laudable agenda for widening participation.