Fairer part-time study repayment system announced
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Issued on 26 October 2011 - BIS
From 2012 eligible part-time
students will be able to borrow the full cost of their tuition fees for
the first time. Changes announced today will see students becoming
eligible to start making repayments over four years after commencing
study, up from three years as previously planned.
Universities and Science Minister David Willetts said:
"We are extending tuition
loan support to part-time students so that they are treated more fairly
than ever before. We have listened carefully to the sector, including
Birkbeck and the Open University, about the details of this because we
are determined to provide the best possible regime for part-time
students. I can now announce that we will amend the legislation so that
no part-time student will have to repay a penny until almost five years
after their course has started.
“Employers particularly
value graduates who already have experience of the workplace, which is
why making part time study more accessible is so important.”
Martin Bean, Vice-Chancellor
of The Open University, said:
“We are delighted by the
Government’s decision regarding part-time repayment arrangements. This
provides even more flexibility for part-time students who, for the
first time ever, will not have to pay upfront and will not have to
start repaying their loan until at least four years after they have
started their studies. This is another important step to ensure that
the UK has a higher education system which is innovative, flexible and
offers students the highest quality.
“Now more than ever, the UK
needs to upskill its workforce and tap the potential of people from all
backgrounds. We look forward to continuing to work with Ministers and
all parties over the coming months to ensure that we continue to have a
world class sector that is open to all who have the ambition to
succeed.”
Professor David Latchman
CBE, Master of Birkbeck, said:
"We are delighted that the
Government has understood the need to put part-time students on a level
footing with full-timers. We can now communicate clear and compelling
messages to our non traditional students – undergraduate study will be
free at the point of study and loan repayment starts after graduation
when salaries are £21,000 or above. For many part-time students, who
are more likely to be mature students, juggling study with family,
mortgages and other financial commitments, this will be an important
consideration when thinking about entering higher education. This is a
vital step towards securing equity for the part-time and full-time
sectors."
Notes
1. These changes are subject to Parliamentary approval.
2. Repayments:
If approved repayments will now be due from the April which falls 4
years after the start date of the course is the student is earning over
£ 21,000.
3. Borrowers only start to repay loans when they earn over
£21,000 a year. The repayment rate will be 9% of income above £21,000.
If earnings fall below £21,000, repayments stop – for example during a
career break or unemployment. Repayments only start again when earnings
are over £21,000. Loan repayments will normally be deducted from salary
through the tax system.
Any loan not repaid after 30 years is written off.
4. Rate of interest:
Interest will be applied at inflation (RPI – Retail Price
Index) plus 3% while studying, and up until the April borrowers are due
to start repaying.
From the April borrowers are due to repay interest will be applied at
the rate of inflation (RPI) (for those earning £21,000 or less);
interest will be applied between RPI and RPI + 3% on a gradual scale
depending on income for those earning between £21,000 and £41,000; and
for those earning £41,000 or more, interest will be applied at RPI + 3%.
5. Borrowers who commence studies in 2012/13 or later, and who
are studying on short courses or who leave their course early and would
normally have been due to make repayments before April 2016 will not
have to make repayments until that date.
6. For those who finish their course earlier, the Student
Loans Company will apply interest at RPI only from the April after
borrowers leave their course until April 2016. From April 2016, the
interest applied to the loan balance will depend on income.
7. The study, Futuretrack:
Part-time
Students from an Employer Perspective, published by the
Higher Education Careers Services Unit (HECSU) in January 2011 found
that employers highly value graduates who gained their qualification
while studying and working part time – see
http://nds.coi.gov.uk/content/Detail.aspx?ReleaseID=417595&NewsAreaID=2
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
