Chamber and committees

Option 3 of the consultation paper suggests a hybrid of options 1 and 2. The details of the policy will be developed following consideration of the consultation responses.

The level of graduate debt repayment is expected to increase by £10 million per annum from 2008-09. The budgeted debt repayments for 2008-09 are £56 million compared with budgeted student loan issues of £180.3 million and student loan subsidy costs of £71.4 million.

I refer the member to the answer to question S3W-19000 on 8 January 2009. All answers to written parliamentary questions are available on the Parliament''s website, the search facility for which can be found at http://www.scottish.parliament.uk/Apps2/Business/PQA/Default.aspx.

Option 2 of the consultation paper suggests an increase of the minimum income available. An investment of £30 million could for example provide for an increase to a level of £5,500 for those from the lowest incomes. The details of the policy, including the number of students and the amount of support provided in each income category, will be developed following consideration of the consultation responses.

The evidence base around individuals'' participation in higher education (HE) has identified a range of financial, cultural, institutional and dispositional factors that influence individuals in their choice of pursuing HE. This evidence does not specifically refer to hardship in isolation but rather that the costs associated with study and a fear of debt generally can impact on individual choices to participate in HE. Costs and fear of debt are identified as key themes in the growing research evidence conducted with current and prospective students.

Ongoing Scottish Government research (Student Income, Expenditure and Debt survey) will provide more up to date information of students'' perceptions of debt and costs and assess the extent to which these are determining factors in students'' decisions to enter HE. This may provide more specific information relative to student hardship, however, will be unavailable until April 2009.

In 2006-07 there were 363,520 students at colleges, holding a total of 468,155 enrolments:

http://www.scotland.gov.uk/Topics/Statistics/Browse/Lifelong-learning/DataTypeFEC.

Income details for college students undertaking further education courses and those on most part-time higher education courses are not held centrally.

Full-time higher education students in colleges and a small number of part-time students who receive support from Student Awards Agency for Scotland (SAAS) provide income details to SAAS. The following table provides parental or spousal income details for those students.

Higher Education College Students Supported by SAAS, by Income Band, 2007-08

Income Band
Income Not Declared/Required	5,535
Less Than £10,000	3,335
£10,000 to £19,999	3,425
£20,000 to £29,999	2,435
£30,000 to £39,999	1,680
£40,000 to £49,999	925
£50,000 to £59,999	455
£60,000 to £69,999	185
£70,000 to £79,999	90
£80,000 to £89,999	45
£90,000 to £99,998	10
Above Means Tested Threshold	55
Exempt from Parental/Spousal Contribution	6,940
All Supported College Students	25,115

Notes:

The income stated is residual income, i.e. after the deductions allowed by SAAS.

All figures have been rounded to the nearest five.

These statistics are provided in Table 6 of Higher Education Student Support in Scotland 2007-08, published on the internet at:

http://www.scotland.gov.uk/Publications/2008/11/21111027/0.

Unwinding of Provisions:

Student loan provisions are created and supplemented on a discounted cost basis, and each year the discount in the provision is unwound. This means that the balance of the provision is uprated by that part of the discounting which relates to the year of account because the provision has moved on a year.

The unwinding element is obtained by calculation with reference to the Retail Price Index (RPI) and the discount rate. For student loans accounting purposes, the RPI used is the RPI in September in the accounting year; and the discount rate is the rate that equates to the Treasury''s cost of capital for provisions.

This being the case, any changes in interest rates will not affect the unwinding calculations unless the Treasury change their cost of capital for provisions. Changes in the rate of inflation will only affect the unwinding calculation to the extent of the change in September in the year of account since that is the index which is utilised, in accordance with the Financial Reporting and Expenditure Manual. The amount of the change will also be dependent on the amount of residual provision available to be unwound.  Based on existing rates, the unwinding of discount on the write-off and debt sale subsidy provisions will be £23.8 million and £4.6 million respectively. This is in excess of budget by approximately £11.8 million and £0.6 million respectively and this additional cost will be met from within the Education and Lifelong Learning portfolio budgets.

Cost of Student Loans:

The cost of student loans is derived by application of the rate, currently 31%, determined by the student loans repayment model which incorporates long-term forecasts for both a discount factor and an RPI figure. Although these two elements are incorporated into the model on a long-term forecast basis, the cost of student loans rate is set for the Spending Review period, which is currently 2008-09 to 2010-11. Therefore, changes to the interest rate and rate of inflation will have no immediate effect on the cost of student loans for this spending review period.

These factors have no effect on the student loans advanced.

There will be no new consequential funding from the new £6 million Department for Environment, Food and Rural Affairs Greener Living Fund. When consequential funding occurs, those consequentials accrue to the Scottish block as a whole and do not fall to the Scottish portfolio equivalent of wherever the money is going in England. The Scottish Government decides its own priorities for the use of all money in the Scottish block.

The Scottish Government recognises the vital contribution that the third sector makes. We wish to secure the development of an innovative, sustainable and inclusive third sector which supports communities and contributes to high quality public services and to increased sustainable economic growth for the benefit of all the people of Scotland. To support this we are investing £93.6 million in the third sector during 2008-11.

The number of students receiving Young Students'' Bursary (YSB) in the academic year 2007-08 was 34,200, as published in Higher Education Student Support in Scotland 2007-08:

http://www.scotland.gov.uk/Publications/2008/11/21111027/0.

The breakdown by assessed residual income is shown in the following table. As YSB is a non-repayable grant it can be assumed that nearly all those entitled to it will also claim that type of support. The income threshold for receipt of YSB in 2007-08 was £32,515.

Number of Students Receiving YSB by Residual Parental or Spousal Income 2007-08

Residual Assessed Income	Number of Students
Income Not Declared/Required	2,175
Up to  £10,000	8,695
£10,000 to £19,999	11,060
£20,000 to £29,999	9,245
£30,000 or over	2,470
Exempt from Parental/Spousal Contribution	555
Total	34,200

Source: SAAS. Numbers have been rounded to the nearest five.