As David Blunkett made clear in announcing his proposals for reforming higher education funding, the present system is not working. Students from poorer backgrounds continue to be seriously under-represented in higher education. There is inequality in the availability of support for living costs as between students in higher and further education and as between full-timers and part-timers. And graduates have to pay back loans on a fixed mortgage-type repayment basis, which is particularly hard on those at the beginning of their careers.
Our proposals have been guided by the following key principles: that access to HE should not depend upon ability to pay; that the repayment of graduate contributions to maintenance costs should be related to income; that access to high-quality HE should be improved; and that the system of funding should be made more efficient.
Under our proposals students from poorer families will have access to larger subsidised loans than those from better-off families and will not have to pay fees. It is hard to see how you can describe this system as one that "looks set to benefit the well-off most".
Nor can I see how you arrive at your conclusion that "wider participation now looks less likely than it did this time last week". By keeping education free for the less well-off, while extending existing maintenance loans, we want to encourage those groups who are currently under-represented in HE, not just the better-off, to participate in the expansion of HE, including through studying closer to home or undertaking distance-learning courses.
Our proposals are based on future earnings, not present circumstances. Repayments will be made on an income contingent basis over a considerably longer period of time than at present and without any real rate of interest. Students at the lower end of the earnings scale will not be unduly penalised as they are under the present scheme. Rather, their repayments will be related to their income.
You quote Stephen Dorrell's comments with apparent approval, overlooking the fact that the Conservatives have been eroding the student grant since 1990. This Government has faced up to the reality that, if access is to be expanded, the present system of funding HE needs to be reformed. Our proposals will raise the money needed to widen access and participation into the 21st century while exempting the less well-off from tuition fees, avoiding any increase in parental contributions and introducing an income-contingent loans repayment system.
Minister of State Department for Education and Employment, London SW1