The Royal Society of Edinburgh (RSE) is pleased to respond to the Scottish Executive Enterprise and Lifelong Learning Department's consultation on The Learning Nation - Helping Students. As Scotland's premier Learned Society, whose aim since 1783 has been the advancement of learning and useful knowledge, the RSE is well placed to offer an independent view on the issue of student finance and the importance of higher education. The Society's Fellowship includes distinguished individuals drawn from Science, Medicine, Arts & Letters, Engineering & Technology, the Professions, Industry and Commerce.

The Scottish Executive's response to the Committee of Inquiry into Student Finance, chaired by Andrew Cubie, includes some useful and welcome developments reflecting a serious attempt to make higher and further education more widely accessible in the long term. There are concerns, however, that there remain significant barriers relating to student finance which may hinder achievement of the wider access to higher and further education being sought by the Executive. In addition, the proposals can appear complex, difficult to rationalise, and throw up inconsistencies that will appear discriminatory, at least to those who feel that the system is operating against them.

The specific issues identified in the consultation document are addressed below:

The Executive's New Student Support Scheme for Higher Education

The Society welcomes the introduction of Access Bursaries and the inclusion of proposals for mature and part time students.

The fear of debt can act as a disincentive to undertaking higher education, therefore the reintroduction of bursaries for students from less well-off backgrounds is welcome. It is unfortunate, however, that the overall package of financial support for the least well-off students will only increase by £500, given that the value of the bursary is largely offset by reductions in student loan entitlement. The primary financial deterrent to access relates to the inadequacy of the total public support in the absence of additional income sources. This is particularly a problem for mature students, lone parents, students from low-income families and those social groups with a cultural resistance to debt.

The threshold for the maximum payment of the Bursary, at £10,000, also seems to be low and could apply to a family with two incomes on the minimum wage. Basing the threshold on one half of the current average wage would be more appropriate.

Should students be entitled to bursaries for more than one degree course, or should it be for the first one only?
The right to further undergraduate bursaries should not be automatic but could be available in certain circumstances, for example, to facilitate lifelong learning and changes of career direction into areas of national priority. Similarly, care should be taken not to put obstacles in the way of access from further education (FE) to higher education (HE). Students achieving entry to university by taking an HND, should not be penalised as a consequence of the support already received towards the HND.

Support for undergraduate degree courses should also not impact upon availability to bursaries for postgraduate courses. If Scotland is to continue to provide highly trained manpower for a knowledge economy it is vital that students studying for higher degrees be well supported.

Should the Mature Student's Bursary Fund be administered by Universities and Colleges?
Mature students should receive a clear message about the support they will receive in the form of a uniform entitlement, regardless of the student's choice of institution. There will also be significant resource implications for universities if they were to administer the scheme which would need to be addressed so as not to further burden overworked university administrations.

Creation of the Mature Student's Bursary Fund should not, however, be simply taken from university Access Fund allocations. Despite the proposed introduction of the Access Bursary some of the most needy students (including students from low-income families and those social groups with a cultural resistance to debt) are likely to still require additional help from university Access Funds.

Should some students studying elsewhere in the UK be entitled to Access Bursaries even though they are outside the scope of the Graduate Endowment?
The Society believes that students studying outside Scotland should be eligible for Access Bursaries.

If so, what should that support be and which students should qualify?
Scottish students studying elsewhere in the UK should not be penalised if their chosen HEI is necessary because of the non-availability of courses in Scotland. But the criterion should be the course and not the university. Undoubtedly this will give rise to difficult and subjective judgements which will need to be dealt with by an impartial panel.

Support should be in the form of Access Bursaries. A consistent stance would be to treat students studying outside Scotland but within the UK in the same manner as students studying outside Scotland elsewhere in the EU.

The arrangements will need careful evaluation of any instances where students face difficulties under the new system. Some of the present rules regarding domicile may become anomalous as the new devolved environment develops. For example, a family moving to Scotland early in the undergraduate career of their child will be expected to continue to apply for funding support to their original English authority for the duration of the undergraduate course - such a rule may cause resentment now that funding systems are different.

The Executive's New Student Support Scheme for Further Education

The Society believes that, generally speaking, the same principles should apply to both higher education and further education with clarity, fairness and consistency.

The Graduate Endowment Scheme for Higher Education

The level of salary (£10,000) which has been adopted for the Endowment is very disappointing. Given that the rationale is that graduates typically benefit (at least in part financially) from their degrees, it would appear fairer to have repayments begin when the graduate is earning more than the national average. While recognising that it is not within the Scottish Executive’s power to amend the threshold for student loan repayment, the Scotland Office could be urged to argue for a separate threshold for loan repayments and endowment contributions at Westminster.

In terms of those taking qualifications below degree level, it could be argued that students also benefit financially from non-graduate qualifications such as HNC or HND. This undermines the argument that payment should be in recognition of the benefits that graduates gain from their degrees and will introduce some strange anomalies in practice.

How long should a student have to decide whether to take out an additional student loan to pay the Endowment?
The Society believes that the proposed deadline of 1 April of the year following graduation is sensible.

Should a discount be offered to those who wish to pay a lump sum endowment even though it would benefit those who are better-off?
Experience from a similar scheme in Australia indicates that offering a small discount (1% to 2%) to those who wish to pay a lump sum has a variety of benefits, including bringing money more quickly into the scheme and reducing administrative costs. However, if the Endowment was to be considered a taxation system, it would be inconsistent to have a discount system.

How should EU students be handled?
The proposed arrangements of using the Student Loans Company seem reasonable. The option of a lump sum repayment would greatly reduce the administrative costs of the scheme in connection with EU students.

What about the liability of students who begin their degree with the expectation that they will pay the Graduate Endowment but who later move into one of the exempt groups?
Students who move into one of the exempt groups during their studies should have their status reassessed at graduation.

Should we continue with the existing rules that give less assistance to those taking a second degree? If not, what should we support (fees/loans/bursaries?)
As noted in our comments on Access Bursaries above, the right to further assistance for a second degree should not be automatic but could be available in certain special circumstances, for example, to facilitate lifelong learning and changes of career direction into areas of national priority. They should also be liable for the Graduate Endowment as with their first degree.

Assessing Family Support for Students

Who in a family should be assessed to contribute towards a student's maintenance?
In the absence of clearly stated legal responsibilities for partners or new parents, the combined financial status of the two natural, or adoptive, parents should be used as at present to provide the measure for means testing.

Should we move towards an income definition in line with the tax system?
Income definition should be moved in line with the tax system in order to provide clarity, although account still needs to be taken of financial commitments and liabilities (for example, another child also studying, a dependent elderly relative, a second family to support).

Is it fair that all HE students should get some support, in the form of a loan, even if they come from very well-off families?
Better-off families should contribute more to the costs of higher education but they already contribute significantly more too. However, some better-off students may experience difficulty, for whatever reason, in accessing parental support. Therefore, there might be merit in some support, in the form of a loan, being available to all HE students.

Special Help for Particular Groups

The relationship between student finance and the Benefits system needs to be addressed on a number of issues and it is hoped that the inter-departmental group mentioned in the document will be able to tackle this matter.

Students and the Workplace

The support arrangements for part-time students are to be welcomed. As the Society noted in its response to the Independent Committee of Inquiry, it is important to ensure that part-time students are not disadvantaged as they are an essential part of lifelong learning and an important means of widening access and participation in higher and further education.

In connection with full-time students undertaking part-time work during their studies, while there are certain benefits from an element of work experience, the present higher education system is not geared to students working part-time during term. There is also strong evidence that in some subjects this work impinges upon the quality of students’ performance and causes some students to fail to reach their full potential. Many students also experience stress both during and after their courses as a result of their relatively high level of financial indebtedness. This is likely to have a significant adverse impact on the graduate community and is already affecting attitudes to employment and remuneration.

Postgraduate Students

It is important to ensure that continuing with postgraduate work after graduation is an attractive possibility for the ablest of our undergraduates. Coming after four years of relative poverty, the attraction of earning an income in many cases outweighs the prospect of further years of poverty, even though there may be higher benefits long-term. With serious shortages in skills existing in various important sectors of the economy, postgraduate training is one route in providing and targeting manpower with the necessary advanced qualifications. The Society has responded to the Executive's consultation on this issue and a copy is attached.

Modernising the Provision of Student Support

How can we continue to improve the delivery of student support?
The commitment to increase the electronic delivery of services is welcome and to be encouraged. In developing and improving the electronic delivery of student support, however, the need to test a system exhaustively before it is introduced cannot be emphasised too strongly, to avoid frustration and loss of public confidence. Recent examples of failure to test new electronic systems thoroughly before introduction make this point clearly.

How can we best bring together advice and information for students?
It is important that the rules about support for HE and FE are explained clearly in readily available documents, for the benefit of prospective and actual students and their families. In connection with students studying elsewhere in the UK, the executive agencies in England and Scotland (DfEE, SAAS etc.) should work together as closely as possible to emphasise the way in which their differing funding systems will apply to various categories of family and student. Guidance literature presently being produced by DfEE and SAAS, however, tends to concentrate on 'typical' students, that is those remaining within their country of domicile, so this point requires close attention.

Planning for the Future

Once the FE and HE support systems are brought more into line, what should we consider next?
The initiatives mentioned in the section seem very sensible. In the future, attention should be given to ways in which to facilitate lifelong learning and changes of direction.

Is there a role for the private sector in providing non-subsidised loans to students?
Banks and other commercial financial institutions do (and will) offer loans at favourable rates to some students but it is probably unwise for the public purse to try to use them as agents of the Government in extending the present options.

Additional Information
In responding to this inquiry the Society would like to draw attention to the following Royal Society of Edinburgh responses which are of relevance to this subject:

Comments on the Recommendations of the National Committee of Inquiry into Higher Education (September 1997)
Review of Postgraduate Education (February 1999)
Funding for the Future: A Consultation on the Funding of Teaching (March 1999)
The Independent Committee of Inquiry into Student Finance (September 1999)
Funding for the Future (April 2000)
Postgraduate Support (August 2000)

Further information is available from the Research Officer, Dr Marc Rands