Chamber and committees

The information requested is given in table 8 on page 56 of the Student Loans Company Ltd’s annual report for 2002-03 published by the Student Loans Companyin November 2003, copies of which are available in the Parliament’s Reference Centre (Bib. number 31394).

The first debt sale was concluded in March 1998 being sold to Greenwich Natwest (GNW), a division of National Westminster, now Royal Bank of Scotland (RBoS). SLC were appointed to undertake the day-to-day administration. The original contract was for five years from March 1998 and SLC successfully negotiated renewal for a further five years administration period commencing March 2003. There are no variations in the contract.

The second portfolio was concluded in March 1999 and the purchaser was a consortium comprising Deutsche Bank, AG London and Nationwide Building Society. SLC were awarded a five year contract to administer the portfolio. The original contract expired in March 2004 and the debt owners took the decision to award the contract for administration to another agency. The key terms and conditions of the loan are all protected.

Loans have been an integral part of an affordable student funding system since 1990. We do, however, appreciate that some students from less affluent backgrounds may be concerned about accruing debt while they study. That is why, in 2001, the Executive introduced the non-repayable Young Student’s Bursary (YSB) to replace part of the loan to which eligible young full-time students from low-income backgrounds are entitled. This will reduce the level of debt which suchstudents would otherwise have on graduation.

I recently announced that, from 2005-06, the maximum annual support provided through YSB will be increased by 11% to £2,395. The parental income threshold has also been increased. These changes mean that approximately 3,000 additional students will now be able to receive the bursary and approximately 20,000 will receive the maximum bursary.

The amount of student loan that a graduate repays each month and the period of time over which repayments are made are linked to the level of the borrower’s income and the amount borrowed. Under the support arrangements introduced in 2001-02, many students who will be liable to pay the endowment when they graduate will have been eligible to receive the Young Students Bursary in place of part of their loan entitlement. Most liable graduates will have borrowed less under the current arrangements than they would have under the previous system. No student should have borrowed more.

Future repayments depend on a wide range or factors, and are therefore difficult to forecast. In the past year work has been carried out to improve the student loans repayment model. There has been extensive testing, though, as with all models, it will be subject to further analysis and refinement.

The table summarises the model’s results for the loan repayments, at different thresholds, from April 2006. From April 2005, the threshold will be £15,000.

Loan Repayments (to the Nearest £5 Million)

Threshold	2006	2007	2008
£10,000	75	105	145
£15,000	35	60	90
£19,000	20	35	55
£25,000	5	10	20

Note: Student loans are treated as outwith total managed expenditure, which means that the net costs are met by HM Treasury (gross student loan advancesless student loan repayments). This income is the repayment of a debtor balance within the balance sheet. This “income” (loan repayments) and the loan advances are shown in the Budget Act to meet the requirements of section 1 of the Public Finance and Accountability (Scotland) Act 2000. At the year-end these figures are reflected within the balance sheet and not within the Operating Cost statement.

Education policy is set by ministers. We work with others, local authorities, teachers organisations and many others, including philanthropic foundations who are committed to improving the quality of Scottish education, to deliver these policies. The precise contribution of other bodies varies according to each circumstance, but philanthropic foundations have already shown they can bring new ideas as well as financial resources, which help achieve educational improvements.

Eligibility is restricted because the number of eligible teachers is controlled by the Scottish  Higher Education Funding Council to match teacher workforce requirements.

It would be possible to extend eligibility to include all teacher education institutions elsewhere in the UK, but we would not be able to limit eligibility to individual institutions. We would therefore be opening ourselves to an indeterminate number of applications, for the most part without teaching vacancies being available.

We regularly review eligibility for the induction scheme, but it is extremely unlikely it will ever be extended to guarantee places to individuals graduating from elsewhere in the UK.

Discussions are on-going with the Home Office to explore possibilities open to Scotland within the work permit system and wider UK immigration policy. Areas of mutual interest include implementation of the Fresh Talent: Scotland Scheme. Under the scheme, international students from outside the European Economic Area who graduate from Scottish institutions will be allowed to live and work in Scotland for up to two years after graduation. We are also discussing ways in which we can promote Fresh Talent through UK schemes, such as the Highly Skilled Migrants Programme, which aim to assist those who wish to live and work in the UK. In addition, we are considering with Work Permits UK ways in which we can better promote the work permit system to Scottish employers.

The Fresh Talent Scotland Scheme, which will allow non European Economic Area graduates from Scottish higher education institutions to remain and work in Scotland for up to two years, comes into effect from summer 2005. It is not possible to determine how many students from Asia will benefit from the scheme at this time. 

Scotland has been successful in attracting international students for a number of years. According to the most recent figures available, there were 7,486 students from Asia studying at Scottish higher education institutions in 2002-03. It is estimated that around 390 of those students were studying for the MBA qualification. The Fresh Talent initiative was launched in February 2004 and it is not possible to report on its impacts in relation to student recruitment atthis stage.