Enterprise and Lifelong Learning Committee, 28 Jun 2000

Meeting date: Wednesday, June 28, 2000

Official Report 137KB pdf

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Education (Student Loans) (Scotland) Regulations 2000 (SSI 2000/200)

The final agenda item is consideration of the Education (Student Loans) (Scotland) Regulations 2000.

We have been joined by Gillian Thompson, who is a member of the Scottish Executive but is rapidly acquiring the credentials of being a member of the Enterprise and Lifelong Learning Committee. I am sure that our paths will cross again during examination of the student finance legislation.

I have no doubt.

I welcome Gillian to the committee again.

Members of the committee have received the papers. There is an explanatory note from the clerk, the Executive note—which was prepared by Gillian Thompson—and a copy of the regulations.

I point out in relation to the third paragraph of the note from the clerk that the Subordinate Legislation Committee considered the instrument at its meeting yesterday and that it has no points to raise with the committee.

I invite Gillian Thompson to make some opening remarks to the committee.

All I need say at this stage is that these regulations govern the making of loans to students under the 1998 arrangements for income-contingent loans. It does not have any impact on the mortgage-style loans prior to 1998—there are still students getting those mortgage-style loans.

The regulations replace the 1999 set and update the scheme. They introduce the loans for part-timers scheme, which was announced in January 1999 by the Westminster Government and was intended to come into force in 2000. It will start from autumn 2000. The general eligibility rules and so on of the part-time loan scheme mirror those for full-time loans, except where they do not—if you see what I mean—which is in relation to income eligibility and eligibility of independents. Other than that they match exactly the loan arrangements for full-time loans.

There are some minor changes from 1999 to tidy things up, such as removing the reference to disability working allowance and replacing it with the updated version, the name of which I cannot remember—I was doing my homework on the train coming back from my health spa, so forgive me. We updated that reference.

A change of slightly more substance was that we took out the need for original documents as there was difficulty in the administration side in accepting original birth certificates, because those were required.

The other significant change was the decision to remove the loan rates that are available for students. That does not have any particular significance, because we have never used the regulatory system for the grant levels under the Students' Allowances (Scotland) Regulations 1999. They are now very complicated as we have different rates of loans for people studying outside Scotland, in Scotland and so on. It was felt that that would not make it terribly easy reading. They were published through a parliamentary question earlier in the year and they are published in the Student Awards Agency for Scotland's literature annually. The levels are published for people to see.

Thank you, Gillian. I am sure that a number of committee members could do with going to a health spa this morning.

I recommend it.

I do not want to appear picky, Ms Thompson, but may I refer you to the annexe?

Which annexe is that?

The one that is attached to the Executive note.

Is that the one on loans for part-time higher education students?

Yes. It states that students must

"Be attending a part-time course consisting of at leased 50% of a full-time course"

—spelt L-E-A-S-E-D.

Really? That is a spelling mistake. I am awfully sorry.

That is quite all right. We all make them. I just wanted to clear that little point up.

It should be "at least", spelt L-E-A-S-T.

Regulation 16, on insolvency, states that for the purposes of section 32 of the Bankruptcy (Scotland) Act 1985, student loans will not be treated as income of an eligible student where the loan is received post sequestration. Is it the case that, once received by a student borrower, student loans will be treated as income for the purposes of income tax and benefits rules?

They are treated as income for the purposes of the social security rules.

That is what I thought. The reason I raise the point is that last week there was a lady visitor to the Parliament who lives in Lochaber and travels each day to Inverness College. She told me that she ceased to receive benefit payments once she received her student loan. Is that a correct application of the law or has a mistake been made in her case?

No. The rules and regulations governing benefits lie with the Department of Social Security. The general rule is, however, that full-time students are not eligible for benefits. Students were removed from eligibility for benefits in 1990, when loans for students and access funds were introduced, which, I am afraid, predates me. Students in vulnerable groups—those with dependants, lone parents and people with a disability—are still eligible, subject to an income test. Loans are taken into account as income for that purpose, although £10 a week is disregarded.

This lady is a single parent, so she is in the vulnerable category. It is puzzling that a loan, which by definition must be repaid, should be treated as income for the purposes of benefits. It seems legally suspect.

I am not sure that that is an issue that we can resolve here. There may be an opportunity to invite a member of the Executive to discuss those things. Gillian Thompson, do you want to say anything about it?

I do not think so. Over the years, this has been an issue, but it is in the hands of the Secretary of State for Social Security to make changes should he wish to do so. It is not something over which we have any control.

The Executive note states:

"The definition of a full-time course is removed as it was based on a DSS benefit definition which is no longer extant."

Can you expand on that a little?

Probably not very helpfully. The definition in the previous loan regulations was not terribly helpful in explaining what was meant. We agreed with the Department for Education and Employment that we should remove it. The types of courses for which loans can be made are in any case set out in the literature that is provided by the Student Awards Agency for Scotland, so there is no particular good in their being in the regulations.

It was just a matter of tidying up. As far as I recall, the benefits regulations used to refer to full-time courses. This issue relates to eligibility for income support and so on, but is of no consequence with regard to the scheme, as it has made no changes to the scheme itself.

Is the DSS benefit definition of a full-time course the same as that which is described in the literature?

I would have to get back to you on that; I cannot give you the verbatim definition now. I could find out.

I would be interested to know.

We appreciate that response to come.

Regulation 4(3)(a) deals with a student not being eligible for a loan if

"he has, in the opinion of the Scottish Ministers, shown himself by his conduct to be unfitted to receive a loan".

Who are the Scottish ministers for that purpose? Is it the whole lot, or just the Minister for Enterprise and Lifelong Learning? Is "conduct" deemed to be conduct in general or conduct relative to academic matters?

I have never yet come across a case in which we have had to make a decision in relation to a student on that basis. Under the Scotland Act 1998, "Scottish Ministers", as a collective, replaced "the Secretary of State", which was a catch-all covering the regulations and the regulatory system. In reality, the responsibility lies with the Students Awards Agency for Scotland and with anyone else who might and could make such decisions.

A student holding an award from the Scottish Executive may behave in such a way that the institution itself might decide that that student should no longer be on the course. Their conduct may be deemed to be of such a level that the SAAS, in conjunction with the institution, may decide that that the student should not continue with an award. I have never come across such a case over several years.

I used to teach part-time students and am pleased to see that, at last, part-time higher education students are to be offered some form of assistance. It has been a long time coming. People studying part time should receive the same sort of support as full-time students.

The figure of 50 per cent of attendance at a full-time course is quoted for part-time courses. Is that through a credit transfer assessment of the value of the course? I am particularly thinking of students who are involved in distance learning, through the Open University, the University of the Highlands and Islands or Crichton campus in Dumfries, where many students will not necessarily physically attend university, but will effectively be attending via a distance learning mechanism. Will those students also be entitled to loans?

No. We have not been able to extend the arrangements to distance learning students because the regulations are made under the powers that are given to the Scottish ministers by the Education (Scotland) Act 1980, which contains a requirement that Scottish ministers can make grants and loans to students in relation to their attendance on a course.

We have taken advice on the understanding of "attendance". That advice covered how "attendance" is understood generally and how it was understood when the 1980 act was being drafted. It dealt with students who were not physically attending on a regular basis—I appreciate that some students go along to the odd tutorial or to summer schools, which was a point made by the Open University.

Because the running of the scheme would be made complex with the need to ask about attendance—"Were you in or were you out?"—our aim would be to make a change to the Education (Scotland) Act 1980 at the earliest opportunity. It is not easy to find opportunities to change primary legislation, and one has to try to identify a relevant piece of legislation. I am hopeful that we will be able to do that in time for distance learning students, including Open University students, to benefit in 2001—obviously depending on how things go.

It is disappointing that students will not benefit now. Most of the courses have some form of continuous assessment. It is disappointing that it will not be possible to use performance—and whether the students appear to be doing the work—to prove attendance, as it were.

I am anxious to move to a conclusion, so I ask Fergus Ewing to be very brief.

The definition of eligible students refers to people under 50 and between 50 and 55. I understand that people between 50 and 55 must, from the day they start, satisfy ministers that they intend to enter employment on completion of the course. To meet that test, is it sufficient that the applicant simply signs a declaration stating that they intend to enter employment?

Yes.

Do they otherwise have to satisfy the Scottish ministers?

No. There is a statement that students fill in on the SAAS application form. It simply asks them what their intention is. They can write a bit in that section of the form, sign the form, and that is it.

I do not think, from what members have said, that we want to report on any specific issues. The committee will therefore report to the Parliament that there are no issues to which we wish to draw its attention.

The Subordinate Legislation Committee made some remarks about the explanatory notes, but that issue will go directly to the Executive.

That brings us to the end of our agenda. Our next meeting will be on Wednesday 6 September, in this room, at 10 o'clock. See you then.

Meeting closed at 12:27.