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BBC Scotland's Forbes McFall reports
"From October, a new deal of student financing will be on its way"
 real 56k

Thursday, 29 March, 2001, 19:38 GMT 20:38 UK
Student finance bill becomes law
Students in lecture
A review of student funding was undertaken
A new funding package for Scotland's students has been passed by the Scottish Parliament, despite objections from opposition parties.

Attempts to raise the salary threshold at which students start paying a graduate endowment were defeated as the bill was passed by MSPs.

Under the new law, graduates will have to start making a contribution to an endowment scheme to help poorer students once their salary reaches 10,000 per annum.

Opposition parties attempted to have that threshold raised to 25,000.

But MSPs voted by 61 to 43 against the amendment to the Education (Graduate Endowment and Student Support) Scotland Bill by Falkirk West independent MSP Dennis Canavan.

Dennis Canavan MSP
Dennis Canavan: Wanted threshold raised
The Tories and the Scottish National Party also had attempts to raise the threshold defeated.

The endowment scheme is intended to reflect the fact that graduates earn more than non-graduates and can therefore afford to fund a bursary scheme for poorer students.

Up-front university tuition fees have been abolished in Scotland. Instead, graduates will either pay off a 2,000 contribution or take out a student loan.

If they take out a loan, their payments would be collected through the Inland Revenue's machinery for collecting student loan payments, which are currently based on a salary level of 10,000.

The Bill also brings in grants for students from low-income families, reforms the loan system and scraps the obligation on students to pay council tax if they share a flat with non-students.

Andrew Cubie
Andrew Cubie investigated student funding
Ministers believe it is a good deal, which is more generous than the one on offer in England.

But critics say it still does not go far enough.

The proposed salary threshold falls short of the 25,000 recommended by Andrew Cubie, whose inquiry into tuition fees led to the setting up of the graduate loan scheme.

Mr Cubie has previously criticised the low threshold saying it came close to a graduate tax.

Mr Canavan warned the proposed system would discourage students from entering higher education and accused the Executive of "stubbornly" refusing to implement the full recommendations of the Cubie inquiry.

"The 10,000 threshold is so ludicrously low," he said.

"One of the objectives of the Bill is to encourage more people to enter higher education but my fear is that many people, particularly from low income families, will be discouraged from entering higher education."

Brian Monteith
Brian Monteith: Iniquitous tuition tax
He added: "We need to ensure a fair deal for students and this is unjust, especially for those on low incomes.

"It is not good enough to say that the scheme is better than the status quo and we should just accept it."

Mr Canavan tabled an amendment for the salary threshold to be raised to 25,000 and adjusted annually according to inflation or an increase in earnings.

He said the collection of payments should be made through a progressive system of income tax.

The Tories branded the Executive's scheme as an "iniquitous tuition tax".

The party's education spokesman Brian Monteith said: "We believe that the collection of this tax at such a low threshold is unjust.

"What students are looking forward to is justice and there is no social justice in this Endowment Bill on such a low threshold."

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See also:

25 Jan 01 | Scotland
Tuition fees legislation hits snag
24 May 00 | Scotland
Cubie response: In detail
25 Jan 00 | Scotland
Full text of tuition fees agreement
24 Jan 00 | Scotland
Ministers to finalise fees deal
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