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Tuesday, 25 January, 2000, 18:27 GMT
Full text of tuition fees agreement

cabinet The Scottish Executive has reached a compromise on student tuition fees


The Cabinet of the Scottish Executive has agreed to recommend to the Scottish Parliament new arrangements for the funding of higher and further education.

It is intended that subject to Parliamentary approval the new system will begin this autumn and will be fully implemented by next year.

The new funding system has been devised by the Joint Ministerial Working Group set up by First Minister Donald Dewar to consider the recommendations of the independent committee of inquiry into student finance chaired by Andrew Cubie which was published in December last year.

The six members of the Ministerial Group - three Labour and three Liberal Democrat - have now agreed a programme which aims to promote lifelong learning, widen access for those who are less well off and at the same time secure funding for future generations of students.

The Package:

The abolition of tuition fees for all Scottish full-time higher education students in Scotland from Autumn 2000 - a year earlier than Cubie planned.

The abolition of tuition fees for all Scottish full-time further education students in Scotland.

Access payments of up to £2,000 targeted at students from low-income families.

A Graduate Endowment of £2,000 to help fund more maintenance for students currently under represented in higher education.

Almost 50% of students will be exempt from the Endowment repayments including all mature students, lone parents, the disabled and HND/HNC students.

No graduate will pay more a month in loan and endowment payments than they do now.

Partnership agreement

Announcing the proposals, First Minister Donald Dewar said: "This is yet another step forward for the Scottish Executive and Parliament. In our Partnership Agreement, we agreed we wanted to provide more student places - vital to the success of the knowledge economy we are building.

"This programme will do that while at the same time widening access to further and higher education for many thousands of Scottish youngsters historically denied that chance because of poverty.


Dewar Donald Dewar: Outlined reforms
"These proposals will also provide new funds for the students of tomorrow while providing the finance needed by our universities and colleges today."

Deputy First Minister Jim Wallace said: "The partnership parties have agreed a comprehensive package that will abolish tuition fees and target support to widen access to higher education.

"This demonstrates the value of a partnership executive and a parliament willing to address the priorities of the Scottish people. In implementing these proposals we will be laying further foundations for a more inclusive Scotland."

BACKGROUND

Abolition of tuition fees for all full time students in further and higher education will cost £27m. Funding for this will be found from savings elsewhere in the Enterprise and Lifelong Learning Department budget.

Access payments of up to £2,000 a year will be targeted at those young people who need them most to promote participation in higher education.

A Scottish Graduate Endowment for the general benefit of undergraduates reflecting the benefits to graduates from higher education and student maintenance. That benefit will not include the tuition fees paid to universities and colleges.

The Scottish Graduate Endowment will be used for the Access Payments for students while studying.

As an incentive to participation, mature students, lone parents, the disabled and those undertaking HNC/HNDs will not be liable for the Endowment.

Scottish students studying in England and English students studying in Scotland will still be liable to pay tuition fees. However, 37% of the Scots currently studying elsewhere in the UK do not pay fees.

EU students in Scotland will pay no fees and will be expected to contribute to the Endowment Fund. EU students in England will continue to be means tested for tuition fees.

FRAMEWORK DOCUMENT

WORKING TOGETHER FOR WIDER ACCESS TO FURTHER AND HIGHER EDUCATION AND A FAIR DEAL FOR STUDENTS

The Scottish Executive agreed, in our Partnership for Scotland, that it was our policy to widen access to further and higher education.

We are committed to increasing the number of students in further and higher education in Scotland.

Our aim is that by 2005 we should see the majority of young Scots going forward to full-time education in our universities or colleges.

We also agreed in May that we would introduce a new, targeted Access Scheme under the title ACCESS 2000 to inject an additional £30m into higher education.

That package doubles the loan funding for part-time students on low incomes to £6m from 2000-01, introduces a £9m pilot scheme over three years to encourage students from low income families to stay on at school with a view to going into higher education, includes Access Funds in higher education to relieve financial difficulties faced by higher education students.

These measures are now in place.

Concerns have been raised about student fees and the financial difficulties facing students while studying.

We set up the Independent Committee of Inquiry into Student Finance under its convener, Mr Andrew Cubie.

It was asked to report by the end of that year and it met that deadline - publishing its findings on 21 December 1999.

The Committee's report was authoritative and objective. It set out some important guiding principles that were widely endorsed during consultation.


Cubie Andrew Cubie: Recommended reform
Those principles suggested that student support should:

"maximise opportunity for all to access high quality lifelong learning"; and

"promote social inclusion, the knowledge economy and an enhanced civil society".

The government should remove barriers to widening access and participation by:

targeting resources effectively on sections of society under-represented in further and higher education;

providing flexible means of support; and

assisting, in particular, students who may not otherwise obtain sufficient support so that education is available to all those with the ability to benefit from study. "

These principles are clearly in line with our own aims to promote wider access to further and higher education and deliver social justice for all.

A Ministerial Working Group comprising three ministers from each of the Executive Parties considered our response to the Committee of Inquiry's report.

We worked collaboratively in dealing with these very complex issues over a short and intensive period.

The main points in our scheme are:

Tuition fees will be abolished from this autumn - a year earlier than the Committee expected.

The Scottish Executive will make up the £42m shortfall in university and college incomes.

We will fund the fees of the 40,000 students in full-time Further Education.

From 2001, Access Payments of up to £2,000 a year will be focussed on those students who need support most while studying - those from low income groups.

A Graduate Endowment will be established to which graduates will contribute - recognising the benefits all graduates obtain from higher education and providing similar opportunities for future generations of students.

As an incentive to participation, those exempted from payment of the Endowment will include mature students, lone parents, disabled students and students on HNC/HND courses - bringing the total of those exempt to almost 50%.

The endowment is set at £2,000 - considerably lower than proposed by the Committee.

Most students will have less debt on graduation. No student will have more debt on graduation than they would under the present arrangements.

The parental contributions for some better off families may increase as against the current position but as all students will have a minimum loan entitlement of £750, contributions will be significantly below the Committee proposals.

The fear of debt and its possible disincentive effects on low income families was stressed by the Committee.

We are clear that the simple abolition of tuition fees would not significantly have improved the position of poorer students and so promote wider access.

Our scheme is affordable, fair and focused.

We believe the package of measures we are outlining is an effective way of promoting increased participation in higher education.

We have agreed that young students from low income groups deserve and should have more support.

Around 10,000 young students (mainly school-leavers) will received an Access Payment of £2,000 a year.

Taking account of adjustments in loan entitlement, they will be £500 a year better of when they most need support and will significantly reduced debts on graduation.

About another 5,000 young students will also benefit from improved support while studying.

All other young students will have no more debt at graduation than at present - even when the payment of the Graduate Endowment is taken into account.

Mature students will also benefit from a Wider Access Bursary Fund of £10m as well as their existing loan entitlement.

An important consideration is the open and international nature of our higher education system.

We all benefit from Scotland's participation in a UK-wide university system.

There are around 20,000 students from the rest of the UK studying in Scotland and 3-4,000 students from other Member States of the European Union. About 6,000 Scots study in English universities and colleges.

It is our duty, under the Scotland Act, always to act in compliance with our European Union obligations and in conformity with the requirements of the European Convention on Human Rights.

We were aware that any scheme that paid the fees of Scots students would also need to benefit EU students studying in Scotland. We carefully considered whether it would be sensible to extend these arrangements to Scots who wish to study at universities or colleges elsewhere in the UK.

We concluded on the best information available that there was a serious risk of successful challenge on the grounds of discrimination against EU nationals attending UK institutions outwith Scotland.

We stress that any Scottish student studying at a college or university elsewhere in the UK would be no worse off than under present arrangements.

A student from a low-income family would be exempt from fees and would not be required to contribute to the Graduate Endowment. On present figures, about 37% of Scottish students studying in other parts of the UK are exempt from tuition fees.

In all the circumstances, we concluded that it was not sensible to extend our arrangements to students studying elsewhere in the UK.

The new arrangements - aside from the abolition of fees - will begin in 2001. As a result, around £50m extra funding will go into student support in a full year.

In this financial year (2000-01) the net cost will be about £18m.

Payment of the endowment will be collected through the current student loans system. Payment of the loans currently begin at £10,000 and are 9% of the income over £10,000.

We maintain those arrangements. Arranging payment in this way means nobody will pay more each month than at present.

Since debt levels for any graduate will not rise, nobody will make a greater payment than at present. We believe this will simplify the administration of the scheme compared to the Committee¿s proposal.

The net cost once the Graduate Endowments are in payment will be around £33m. We have based our costing on the resource accounting system followed by the Scottish Executive.

The funds required for the new arrangements will need to be found from within the Scottish Block.

In the first instance, this will be sought from the funds of the Department of Enterprise and Lifelong Learning.

This necessarily will involve difficult choices particularly at a time when significant investments are needed to build a successful knowledge driven economy in Scotland.

We will fully respond to the Committee's other recommendations in the spring. That will include further details of the way in which our proposals will be implemented.

The Committee was not given the task of designing a new system of student support nor does this document seek to set out such arrangements.

That detailed system will involve information gathering, consultation and discussion with those who will be affected by, and benefit from, these measures.

One important obligation is to ensure fair transitional arrangements for those students already studying. What we have set out is the broad framework for modernising student support and its delivery in Scotland.

We are determined to work together so that Scotland earns a world-class reputation for education and so that we might fully equip our people for the challenges and opportunities of the coming years.

For all of these good reasons, we commend our arrangements to the Scottish Parliament and to the people of Scotland.

ANNEX A

CUBIE COMMITTEE RECOMMENDATIONS

The Committee made 52 recommendations covering a wide range of matters. Its main recommendations were that:

Tuition fees should be paid by the Scottish Executive for all full time higher education students;

Graduates (but not those taking HNCs or HNDs) should pay a sum of £3,075 for all courses in respect of "general higher education received" at the rate of 2% of total income when they reach £25,000 a year;

Bursaries of up to 50% of the level of student support should be introduced for some young students.

Those from families with income below £17,000 should get the full 50% with a taper to no bursary at £23,000. A scheme should also enable universities to fund 100% bursaries for some young students;

Particularly disadvantaged mature students should also be able to qualify for bursaries from a new scheme;

Student support levels should be increased by 13% across the board and nobody with income below £23,000 a year should have to make a parental contribution;

Lone parents should be given a £1,500 allowance to cover childcare costs;

Savings to fund part of these measures would come from reduced Access Funds and means testing all support for high-income groups.

Those earning above £47,000 a year would need to pay all the costs of student maintenance;

Further education students' bursary levels and means test should be brought into line with higher education but loans should not be introduced;

The new scheme should be introduced in 2001-02 with a choice for current students as to whether they move to the new scheme or remain on the old one.

The total cost of the package would cost the Executive an additional £71m in a full year if £35m could be raised through the Graduate Endowment.

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See also:
25 Jan 00 |  Scotland
Ministers defend fees deal
25 Jan 00 |  Scotland
Anger at 'shabby' fees agreement
25 Jan 00 |  Scotland
Students reject Cubie deal
25 Jan 00 |  Scotland
Reid fields opposition fees' anger

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