Scottish Government

CONSULTATION DOCUMENT
REVIEW OF DISTRIBUTION OF PAYMENTS FOR HIGHER EDUCATION STUDENT SUPPORT ¹

This document is also available in pdf format (60k)

Introduction

1. This consultation paper invites comments on options being considered for changing the distribution of payments of living cost support (Student Loans and Young Students' Bursary) to Scottish-domiciled students at Scottish Higher Education Institutions (HEIs): i.e. universities and colleges delivering Higher Education (HE) in Scotland ².

2. Responsibility for living cost support for Scottish-domiciled students rests with Scottish Executive Ministers, and the formal scope of the consultation paper covers this group of students only. However, given the extent of cross-border student flows to Scotland ³, it is important that the interests of the Department for Education and Skills (DfES), Welsh Assembly Government and Department for Employment and Learning, Northern Ireland (DELNI) are also recognised in the consideration of policy options. It will be for the DfES, DELNI and the Welsh Assembly Government to decide separately how the results of this consultation process inform future thinking in their respective areas of student support policy responsibility, including for non-Scottish-domiciled students in Scotland. (The other administrations are represented on the project Delivery Group, as noted below).

Background

3. A number of HEIs in Scotland have changed their pattern of academic year, comprising two longer semesters and a shorter exam period, rather than three equal terms. However, Student Loans are paid in 3 equal instalments, at the start of each term with a 33%, 33% and 34% split of total funding through the year. We are now considering whether the timing and proportionate amount of each payment remain appropriate to the period of study. This follows representation by student bodies and, also, the publication of the Executive's Review of Funding of Learners in September 2004. The Review highlighted the marked differences in payment of HE student support (compared to Further Education), whilst evidence from work on Hardship Funds has highlighted difficulties for HE students' budgeting when paid only 3 times a year within the existing 33%/33%/34% split.

4. The Young Students' Bursary is currently paid to Scottish-domiciled students at Scottish HEIs termly in 3 instalments, with the amounts proportionate to the length/number of days in the term/semester/block of study.

5. DfES has undertaken previous research on the distribution of Student Loan payments. In 2003, DfES investigated the possibility of giving students the option of monthly or termly payments, consulting with student representative bodies and HEIs. The student bodies were in favour of giving students a choice in the way they receive their loan instalments, but HEIs had some reservations. DfES also consulted students directly and found that about 50% were in favour of receiving monthly loan instalments. In 2003, DfES and the Student Loans Company (SLC) explored a new payment model under which students would be able to choose to receive their Loan payments monthly, within the 66:34% split across financial years.

6. The Executive will shortly publish a research paper - Student Funding Systems Elsewhere - which summarises the funding arrangements in selected OECD countries, as part of the analysis undertaken for the Review of Funding of Learners. The paper confirms that, in most of the other countries studied (where the information was available), student support in Higher Education is paid on a monthly basis ⁴.

Delivery Group

7. The Executive has established a Delivery Group to look in detail at the options for changing the amounts and frequency of HE student support payments from academic year 2006-07 and beyond. The Delivery Group is comprised of representatives from the Funding for Learners Division of the Enterprise, Transport and Lifelong Learning Department (which has the policy lead and will provide the secretariat for the Consultation), Higher Education and Science Division, Analytical Services Division, Scottish Executive Finance Group, Student Awards Agency for Scotland, Student Loans Company, DfES, DELNI and the Welsh Assembly Government.

Terms of Reference

8. The terms of reference of the Delivery Group are:

• to examine policy options on the amounts and timing of the payment of Student Loans and Young Students' Bursary to Scottish domiciled students studying in Scotland, with a view to introducing interim changes for academic year 2005-06 and a long-term solution for academic year 2006-07 and beyond; and
• taking account of the costs and benefits of those options - including those relating to student choice, administrative ease/complexity, the delivery of public services, and the resource cost implications (given the existing budget provision) - to make recommendations.

It should be noted that this consultation focuses on the possible arrangements for 2006-07 and beyond. The interim arrangements being put in place for 2005-06 are outwith the scope of the consultation.

The Options

9. The options being considered by the Delivery Group are set out below. The following background points should be noted:

• The scheme currently in place for Scottish students at Scottish universities and colleges (in respect of HE courses) - with the exception of Stirling University and Dundee University (where there are manual work-arounds in place at the Student Loans Company) is that: 33% of the student's Student Loan support is paid at the beginning of the first term (September or October); 33% is paid in January; and 34% in April (of the same academic year, but the following financial year). This pattern of payment was based on academic years being divided into three equal terms.
• Bringing forward payments of support from one financial year to the previous financial year (within an academic year) has resource costs, given the treatment of Student Loans within the government accounts. The Delivery Group intends to publish an Analytical Paper by the end of March 2005 to provide further information on costs and benefits.
• The consultation does not cover Scottish-domiciled students studying outwith Scotland.
• We would not intend for student support to be paid during the long summer vacation.
• Annex A to this consultation paper provides illustrative examples of what the options would look like in terms of amounts of money paid out, based on two possible examples.

10. It is essential that consultees comment on all of the options noted below - not just their preferred one - and provide detail on their advantages, disadvantages and any unintended consequences.

11. The options are:

Option 1a). Leaving the current payment pattern unchanged and resort back to the 2004-2005 model of Student Loan payments in instalments of 33%, 33% and 34%.

Option 1b). Using the interim arrangements for 2005-06 as a long-term solution whereby Student Loan payments would be paid in instalments of 36%, 33% and 31%.

Option 2. Proportionate payments at the start of each period of study. This pattern of payments would reflect the average lengths of the study periods within the academic year. It would give students equal amounts of support each week of the academic year. The amounts would be based on the average term/study block lengths within each HE institution.

Option 3a. Monthly payments for all, with some front-loading of the first 2 months payments. The first payment would be made on the 1 ^st day of the academic year and the others following monthly on a named date each month (such as the 1 ^st). For example payments could be made with 2/10ths of the Student Loan and Young Students' Bursary paid in August/September/October (i.e. a larger initial payment) and 1/10th paid monthly between September/October/November and May/June (in 8 payments).

Option 3b. Monthly payments for all, within the current termly allocated proportions. Payments of Student Loan and Young Students' Bursary would be equal throughout the year with one-third of 33% paid each month from October to March, and one-third of 34% paid monthly from April to June. The main difference to the current pattern would be that the blocks of payment would be monthly instead of termly (this could also be front-loaded with 2 months payment upfront).

Each of the above options, if adopted, would apply to all students (that is: all Scottish-domiciled students (only) or all Scottish-domiciled and other students, as discussed above). The final option would allow for variations by individual student at each HE institution.

Option 4. Student choice between monthly, termly or semesterised (study block) payments. The individual student would be able to select one of the above options as the choice on how to receive their Student Loan and Young Students' Bursary payments. The choice would not be able to be changed within the academic year.

Consultation Issues

12. We would welcome your comments on all the options listed above. In particular, you are asked to consider:

12.1 Is there a need to change from the current payment pattern in 2004-05?

12.2 What will benefit students the most in terms of budgeting?

12.3 Given the opportunity to change the system, what would be the optimum outcome?

12.4 How can we avoid any (potential) confusion in the system?

12.5 How can we structure the system also to fit the needs of intermediaries (in particular, the universities and colleges)?

12.6 What could be the unintended consequences of any of the options?

12.7 Are there any other useful options that we have not listed?

Arrangements for Consultation

13. This consultation paper is being issued to a wide range of organisations that have an interest in how student support is paid, as detailed in Annex D. Anyone who has an interest is encouraged to respond. It would be very useful if individuals could indicate in which country they are ordinarily resident when responding to the consultation. This is discretionary and entirely the choice of those who respond.

Responding to this Consultation Paper

14. We are inviting written responses to this consultation by 29 April 2005. Please send your response to:

Fiona Mejury
Scottish Executive
Enterprise Transport and Lifelong Learning Department
Funding for Learners Division
Europa Building
450 Argyle Street
Glasgow
G2 8LG
Or by email to:
Fiona.mejury@scotland.gsi.gov.uk

15. If you have any queries please contact Fiona Hesling on 0141 242 0235.

16. We would be grateful if you could clearly indicate in your response which questions or part of the consultation paper you are responding to as this will aid our analysis of the responses received.

17. This consultation, and all other Scottish Executive consultation exercises, can be viewed online on the consultation web pages of the Scottish Executive website at http://www.scotland.gov.uk/consultations. You can telephone Freephone 0800 77 1234 to find out where your nearest public internet access point is.

18. The Scottish Executive now has an email alert system for consultations (SEConsult: http://www.scotland.gov.uk/consultations/seconsult.aspx). This system allows stakeholder individuals and organisations to register and receive a weekly email containing details of all new consultations (including web links). SEconsult complements, but in no way replaces Scottish Executive distribution lists, and is designed to allow stakeholders to keep up to date with all Scottish Executive consultation activity, and therefore be alerted at the earliest opportunity to those of most interest. We would encourage you to register.

19. Additional copies of this consultation can be obtained from Fiona Mejury at the above address.

Alternative Formats

20. The text of this consultation paper will be made available, on request, in alternative formats. Anyone requiring the document in an alternative format should contact Fiona Mejury at the above address.

Handling your Response

21. We need to know how you wish your response to be handled and, in particular, whether you are happy for your response to be made public. Please complete and return the Respondent Information Form enclosed with this consultation paper as this will ensure that we treat your response appropriately. If you ask for your response not to be published we will regard it as confidential and will treat it accordingly.

22. All respondents should be aware that the Scottish Executive is subject to the provisions of the Freedom of Information (Scotland) Act 2002 and would therefore have to consider any request made to it under the Act for information relating to responses made to this consultation exercise.

Next Steps in the Process

23. Where respondents have given permission for their responses to be made public (see the enclosed Respondent Information Form), these will be made available to the public in the Scottish Executive Library by 27 May 2005 and on the Scottish Executive consultation web pages by 3 June 2005. We will check all responses where agreement to publish has been given for any potentially defamatory material before logging them in the library or placing them on the website. You can make arrangements to view responses by contacting the Scottish Executive Library on 0131 244 4552. Responses can be copied and sent to you, but a charge may be made for this service.

What Happens Next?

24. Following the closing date, all responses will be analysed and considered along with any other available evidence to help us to reach a decision on reviewing the distribution of payments for Higher Education student support. We aim to issue a report on this consultation process by the end of May 2005 and, if appropriate, make changes for the academic year 2006-2007.

Comments and Complaints

25. If you have any comments about how this consultation exercise has been conducted, please send them to:

Fiona Mejury
Enterprise Transport and Lifelong Learning Department
Funding for Learners Division
1 ^st Floor
Europa Building
450 Argyle Street
Glasgow G2 8LG

ANNEX A

Example 1

26. Below we have illustrated what the payments of support would be for the consultation options based on a student studying at Edinburgh University being eligible for - and taking out - the maximum Student Loan and Young Students' Bursary (YSB) entitlement. This example is based on a student living away from home and receiving the maximum Student Loan of £2,475 and maximum YSB of £2,150 in 04-05. For the purposes of this example, we have used Edinburgh University's term dates.

Option 1a- leaving the current payment pattern unchanged

Option 1b- Changes to 05-06 loan payment pattern to become permanent

Option 2- Proportionate payments at the start of each period of study

1. Option 2	20 Sep	1 Oct	1 Nov	1 Dec	10 Jan	1 Feb	1 Mar	18 Apr	1 May	Total
   Student loan	£1,073				£907			£495		£2,475
   YSB	£932				£788			£430		£2,150

Option 3a - Monthly payments for all, with some frontloading of the first 2 months payments

Option 3b- Monthly payments for all, within the current termly allocated proportions

ANNEX A

Example 2

27. Below we have illustrated what the payments of support would be for the consultation options based on a student living at home and who is not eligible for YSB and taking out a Student Loan entitlement of £3,289. For the purposes of this example we have based the term dates on a student studying at Glasgow University in 04-05.

Option 1a- leaving the current payment pattern unchanged

Option 1b- Changes to 05-06 loan payment pattern to become permanent

Option 2- Proportionate payments at the start of each period of study

Option 3a - Monthly payments for all, with some frontloading of the first 2 months payments

Option 3b- Monthly payments for all, within the current termly allocated proportions

ANNEX B

RESPONDENT INFORMATION FORM: REVIEW OF DISTRIBUTION OF PAYMENTS FOR HIGHER EDUCATION STUDENT SUPPORT

ANNEX C

THE SCOTTISH EXECUTIVE CONSULTATION PROCESS

Consultation is an essential and important aspect of Scottish Executive working methods. Given the wide-ranging areas of work of the Scottish Executive, there are many varied types of consultation. However, in general, Scottish Executive consultation exercises aim to provide opportunities for all those who wish to express their opinions on a proposed area of work to do so in ways which will inform and enhance that work.

The Scottish Executive encourages consultation that is thorough, effective and appropriate to the issue under consideration and the nature of the target audience. Consultation exercises take account of a wide range of factors, and no two exercises are likely to be the same.

Typically Scottish Executive consultations involve a written paper inviting answers to specific questions or more general views about the material presented. Written papers are distributed to organisations and individuals with an interest in the issue, and they are also placed on the Scottish Executive web site enabling a wider audience to access the paper and submit their responses. Consultation exercises may also involve seeking views in a number of different ways, such as through public meetings, focus groups or questionnaire exercises. Copies of all the written responses received to a consultation exercise (except those where the individual or organisation requested confidentiality) are placed in the Scottish Executive library at Saughton House, Edinburgh (K Spur, Saughton House, Broomhouse Drive, Edinburgh, EH11 3XD, telephone 0131 244 4565).

All Scottish Executive consultation papers and related publications (eg, analysis of response reports) can be accessed at: Scottish Executive consultations ( http://www.scotland.gov.uk/consultations)

The views and suggestions detailed in consultation responses are analysed and used as part of the decision making process, along with a range of other available information and evidence. Depending on the nature of the consultation exercise the responses received may:

• indicate the need for policy development or review
• inform the development of a particular policy
• help decisions to be made between alternative policy proposals
• be used to finalise legislation before it is implemented

Final decisions on the issues under consideration will also take account of a range of other factors, including other available information and research evidence.

While details of particular circumstances described in a response to a consultation exercise may usefully inform the policy process, consultation exercises cannot address individual concerns and comments, which should be directed to the relevant public body.

ANNEX D

LIST OF CONSULTEES

Association of Scottish Colleges

BRITE
Careers Scotland
Coalition of Higher Education Students in Scotland
Child Poverty Action Group
Communities Scotland
COSLA
Department for Education and Skills
Department for Employment and Learning Northern Ireland
Future Skills Scotland
HE Disability Co-ordinators Advisor
LEAD Scotland
Learndirect Scotland
Local Education Authority Careers Headquarters
Local Education Authority Directors of Education
Motherwell College
National Union of Students, Scotland
One Parent Families Scotland
One Plus
Open University
Principals of all Further Education Colleges
Principals of all Higher Education Institutions
Rosemount Lifelong Learning
Scottish Council of Voluntary Organisations
Scottish Disability Team
Scottish Funding Council
Scottish Further Education Funding Council
Scottish Further Education Unit
Scottish Poverty Inclusion Unit
Skill Scotland
STUC Lifelong Learning Unit
Student Awards Agency for Scotland
Universities Scotland
Welsh Assembly Government
4-Consulting Ltd

Footnotes

1This consultation is without prejudice to the associated interim arrangements for academic year 2005-06 and does not represent a commitment to changing the current arrangements for Higher Education student support.

2 This consultation does not cover other forms of student support such as supplementary grants and the discretionary funding made to students by institutions.

3 In the latest year for which we have data, 2002-03, there were 14,138 full-time English-domiciled first degree students and 318 full-time English-domiciled sub-degree students in Scotland. For Welsh-domiciled students, the equivalent figures were 373 and 9 and for Northern-Ireland-domiciled students the figures were 4,833 and 105. There have been increases in the number of applications and acceptances of English students by Scottish HEIs in 2003-04 and of applications in 2004-05.

4 Student Funding Systems Elsewhere, Scottish Executive, February 2005, forthcoming.

5 http://www.scotland.gov.uk/consultations