MSPs back dropping endowment fee

4th January 2008 at 00:00
The graduate endowment fee, paid by Scottish university graduates to support poorer students, passed its first hurdle at the end of the year when the bill to abolish it passed its first parliamentary stage.

Although the education committee had rejected the Graduate Endowment (Abolition) Bill, it succeeded in getting the backing of 65 MSPs, the minimum needed for a majority. Liberal Democrats, Greens and the Independent Margo Macdonald supported the SNP Government. It will now return to the education committee for further scrutiny.

In the debate last month, Fiona Hyslop said it was time to return to free education: the Education and Lifelong Learning Secretary told MSPs that the graduate endowment could not be afforded by two-thirds of students who simply added it to their loan. The average student left university owing pound;11,000. The bill would remove pound;2,300 from that debt, she said.

Ministers were taunted by opposition MSPs to explain why, if student debt was so important, they did not wipe it out completely. The Government also plans to reintroduce student grants to replace loans, beginning with a pound;500 grant to benefit 20,000 part-time students.

Although all parties are committed to widening student access, the figures show that, in the four years after the introduction of the endowment fee in 2002, entrants to higher education increased by just 1 per cent - to 15 per cent. Ms Hyslop said this was minimal progress, while Jeremy Purves, for the Liberal Democrats, said it was also evidence that the fee had not done much harm either.

Karen Whitefield, the Labour convener of the education committee, whose casting vote defeated the bill in her committee, said the Government's policy was based on "an ill-conceived manifesto commitment, rather than on sound research and evidence it would support young people in obtaining a higher education".

Government officials had told the committee that no other options had been considered before introducing the legislation.

Ms Hyslop rests her case on the fact that the endowment fee is inefficient: with so much of the fee being added to loans, the taxpayer loses around a third of the income. But Labour's Elaine Murray said this was because the loan was subsidised to give an interest rate of 0 per cent, not because it was an inefficient system.

Abolition of the endowment fee will cost the Government an estimated pound;17 million a year.

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