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Last Updated: Monday, 28 August 2006, 06:01 GMT 07:01 UK
Drop in student loan 'bankrupts'
Students at a degree ceremony
Nicola Sturgeon said young people were held back by student debt
The number of student loan borrowers in Scotland who declared themselves bankrupt fell last year.

Figures from the Student Loans Company (SLC) showed 677 borrowers declared bankruptcy in 2005 - down from the all-time high of 811 the previous year.

But the Scottish National Party (SNP) said the figure was still too high and reinforced the case for grants.

The Scottish Executive said student loans were repayable on affordable terms, with amounts linked to income.

Last month, the SNP's deputy leader, Nicola Sturgeon, announced plans for 100m funding package to help eliminate debts and reintroduce student grants.

Moving to grants rather than loans would not make sense
Scottish Executive

On Monday, the party will use the figures on bankruptcy to say its case has been strengthened.

A party spokesman said: "These figures reinforce the need to end tuition fees for students. It's now the case that students finish their studies with an average of 11,000 of debt around their necks.

"The SNP is committed to ending tuition fess and replacing loans with grants which will ensure that education is once again based on the ability to learn not the ability to pay."

But the executive denied there was a widespread problem and said it had taken steps to reduce student debt.

A spokesman said: "We have abolished tuition fee contributions for eligible full-time Scottish domiciled students.

"Young Student Bursaries have been introduced to reduce the level of debt which students accrue.

"From last year, the maximum annual support was increased by 11% and the parental income threshold was also increased so that many thousands more could benefit.

"Moving to grants rather than loans would not make sense. It is more expensive to provide student support in this form."

See SNP reaction to the figures

SNP makes 'free education' pledge
22 Jul 06 |  Scotland
MSPs vote for university fee rise
15 Jun 06 |  Scotland
Student 'fee factor' played down
17 Feb 05 |  Scotland
Funding plea over top-up fees
08 Jan 04 |  Scotland

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