Background
The Government published its White Paper The future of higher education in January 2003. The changes have now received parliamentary approval and the Higher Education Act came into force on 1 July 2004. The Act makes a number of changes to student finance, with the aim of targeting support on those who need it most. It is important that young people thinking about going into higher education and those that advise them, understand the financial help which will be available in future, so that young people can make informed decisions based on accurate information.
Whilst a various of channels will be used to inform young people of the student finance available to them it is essential that those advising them are also made aware of the changes, so that they are best placed to offer correct, factual information. The key changes are included at Annex A. Further information on the changes can be found in the leaflet The future of higher education: A brief guide to the new student finance arrangements or on the website at www.dfes.gov.uk/studentsupport/
Copies of the guide can be ordered from the DfES Information Line on 0800 731 9133 quoting reference DfES/0696/2004.
The Positive Impact on Young People
Connexions PAs are a key source of information and guidance for young people thinking about entering higher education and need to pass on accurate information about the new student finance arrangements to young people to help them make informed life choices.
Feedback
We would appreciate your feedback and comments on the usefulness of this information. Comments should be sent via email to connexions.actionnotes@dfes.gsi.gov.uk Please include the reference number (at bottom of page) and title of the note in the subject box of your email. Thank you.
Annex A
HIGHER EDUCATION STUDENT FINANCE CHANGES
ABOLITION OF UP-FRONT FEES FOR FULL-TIME UNDERGRADUATE COURSES
- From 2006 full-time undergraduates will not have to pay any money up-front, or while they are studying. Instead, both new and existing students will be able to defer payment of their tuition fees by taking out a student fee loan, which they will start repaying after they leave higher education and are earning more than £15,000 a year.
- Universities will be able to vary fees from £0 to £3,000 per year for new starters from 2006. The maximum they can charge will be capped at £3,000 (apart from an adjustment to take account of inflation) until 2010 at the earliest. The amount universities charge may vary between courses, as well as between universities.
- Students who have started their higher education courses before 2006 will continue to be subject to the current arrangements whereby they make a contribution towards their tuition fees up to the standard fee of around £1,200 depending on their household income. However, from 2006 these students will also be able to defer payment until after they leave university.
GAP YEAR STUDENTS
- Students who are offered a higher education place in September 2005 but decide to obtain a deferral from their chosen university and take a gap year before starting in September 2006, will not have to pay the new variable fees of up to £3,000 a year. Instead they will be treated as if they started in 2005 and will be asked to make a contribution towards their tuition fees of up to around £1,200 depending on their household income. This payment can also be deferred.
GRANTS AND MAINTENANCE LOANS
- From 2006, new full-time students from lower income households will be eligible for a new income assessed non-repayable maintenance grant of up to £2,700. Around half of all new full time students are expected to receive a full or partial grant.
- Students from lower income households who started university in 2004 or 2005 (or are treated as having started in 2005) will continue to be eligible for the Higher Education Grant of up to £1,000 a year introduced in September 2004.
- The maximum rates of the student maintenance loans will be raised from September 2006 to help students meet their basic living costs. The biggest increase will be in London and these higher rates will be available to both new and existing students.
- From April 2005, the repayment threshold at which all student loans start to be repaid will increase from £10,000 to £15,000.
- For students starting their studies in 2006 or later, the Government will write off all student loan balances which are left unpaid 25 years after the individual has left their course.
SAFEGUARDS FOR STUDENTS
- Universities wishing to charge more than the standard fee of around £1,200 will first have to enter into an Access Agreement with the new Office for Fair Access (OFFA). These Agreements will set out the universities proposals for improving access including the action they will take to promote fair access, so that students from all backgrounds are encouraged to apply. These agreements must include financial support for students.
- Universities who decide to charge the maximum £3,000 for a course will have to provide at least £300 a year in financial support, such as bursaries, to students on those courses who are receiving the full £2,700 maintenance grant. This means that students who receive the full maintenance grant and who are on courses charging £3,000 will get a package of non-repayable support of at least £3,000 a year. Some will get more than this, as many universities are expected to offer bursaries of more than £300.
More info: www.dfes.gov.uk/studentsupport/
Source: Action Note for Partnerships
Ref No: CXP 172
Date: 26 July 2004
Contact
Angela Archer, angela.archer@dfes.gsi.gov.uk on 020 7925 5635 or Paul Higgs, paul.higgs@dfes.gsi.gov.uk on 020 7925 5310
