V-cs seek part-time loans rethink

August 7, 1998

Vice-chancellors have called on the government to redefine student loans so they can be extended to part-timers.

Although recently announced changes in accounting rules for student loans were a positive step, they did not go far enough, the Committee of Vice-Chancellors and Principals says in its response to the government's lifelong learning green paper.

The response, published this week, says introducing income-contingent loans for part-timers should be given priority, and adds: "If student loans were redefined so as not to count in full against the Public Sector Borrowing Requirement ... a further constraint on the extension of the loan scheme would have been removed."

The paper points to the findings of a London Economics report for the Open University that concluded that extending loans to Britain's 500,000 part-time students would cost the state an extra 0.5 per cent per annum of expenditure on loans in the short term, and 1.5 per cent in the long term.

The government's decision to pay the fees of part-time students made unemployed after the start of their course should also be extended to include part-timers who are unemployed when they start a course, it adds.

Loans for part-timers might be channelled through individual learning accounts, together with contributions from employers and student savings, the paper suggests.

The government should introduce tax incentives to encourage employers to contribute more to learning, possibly through individual learning accounts.

The Pounds 150 from the state plus a possible Pounds 25 for each individual in the ILA scheme to pay for training is too low unless ILAs lead to other funding, such as from employers, says the paper.

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