Student loans could be in monthly doses

Higher education minister Margaret Hodge has asked the Student Loans Company to investigate paying out loans monthly so that students can manage their finances better.



On a day of high visibility for her department, with a new boss just announced, Ms Hodge was asked by a Labour member of the Education Select Committee, Jonathan Shaw, whether the government would look at how it funded students.

"Rather than giving students who have the least experience and a small amount of money, all up front at the beginning of term, wouldn't it be better if we gave students a choice of actually having monthly payments and that would actually help them manage their finances much better," he said.



Ms Hodge said: "I am delighted to inform you that I have asked the Student Loans Company whether or not that would be a feasible option for the future payment of loans". Students should see the contribution they make to the cost of their education as "an investment" because over a lifetime they would earn ?400,000 more than those who had not been to university, she said. "In that context if they incur costs of up to ?10,000 it's a good investment, not a cost."



Challenged over top-up fees, she refused to rule out the possibility and was criticised by David Rendel, the Liberal Democrat education spokesman. "Top up fees would increase student debt and make it even harder for those from less well off backgrounds to enter higher education. The Government cannot both introduce top up fees and say they want to widen participation - these two policies are contradictory," he said.



Ms Hodge also said that planned strike action by college staff was "not necessary" after the government last month gave colleges ?32m to bring lecturers and support staff earnings into line with school pay. Five of the six college unions have planned industrial action starting on November 5. "It is my view that industrial action is not necessary given the announcement that we have made the extra ?32m ... available to the employers to ensure that they can negotiate with all the unions and reach agreement. That ?32m is the same as 1 per cent on the pay bill and it is my view that that is sufficient for there not to be industrial action next month."

Ms Hodge said ?12m of the ?32m Teaching Pay Initiative would allow colleges to extend the programme to support staff. "Colleges have the flexibility to determine how they allocate their share of the ?32m between different groups of staff to meet local priorities," she said.



The Education Department has already announced that college funding will increase by 1% in real terms over the next three years. Ms Hodge said: "We have a manifesto commitment as you will know to ensure that we raise the level of pay in further education colleges so that we do get equal funding between the two sectors" - schools and colleges.