Page last updated at 11:33 GMT, Monday, 5 October 2009 12:33 UK

Loan deal to fund student pledge

students
There was a big increase in demand for places this year

The Conservative Party says it would create an extra 10,000 university places if elected.

It would fund them by giving a 10% discount on student loan repayments to those who repaid ahead of schedule.

It says this would reduce by £300m the £30bn cost of student loans - which attract no interest in real terms.

The policy marks a significant change. In the past the party has been against the expansion of higher education and Labour's target of 50% participation.

This year student places became a headline issue when the government had to curb its expansion plans.

This coincided with a rise of more than 9% in applications - fuelled in part by the lack of alternatives during the recession.

Late in the day the government then provided 10,000 more places for 2009-10 in key strategic subjects.

'Vital'

The Tory policy was announced by shadow higher education spokesman David Willetts.

NUS president Wes Streeting
Wes Streeting: concerned about poorer students

He said: "This summer has seen a crisis in university places. The government's failure to create a fair and affordable system means that thousands of young people with good exam results have been unable to get the education they need.

"With one in six young people not in work or education or training, it is vital that we prevent a similar crisis next year."

The president of the vice-chancellors' organisation Universities UK, Professor Steve Smith, said: "This commitment to higher education is extremely encouraging at a time of competing pressures on the public purse in a period of economic austerity."

He said they looked forward to discussing with the Conservative Party "how we can ensure that their proposals do not disadvantage students from lower income backgrounds".

This was the issue that concerned the National Union of Students president, Wes Streeting.

"We would be concerned if this approach set a precedent whereby those from more affluent backgrounds enjoyed preferential repayment conditions on loan debt," he said.

"Given that those from the poorest backgrounds are most likely to lose out without an urgent expansion of places, this is an acceptable short term fix."

So far the Conservatives have not set out their stall on university tuition fees.

At the 2005 election they proposed scrapping fees, but that policy was abandoned shortly after their defeat.

The current policy is to wait for the review of fees that was promised by the government when they were introduced.

This review is due to start soon - and not due to report until after the next general election.



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