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The number of students aged 25 and over receiving support from the Student Awards Agency for Scotland has remained broadly unchanged since the introduction of a wholly loan based system of living cost support in 1999. This would suggest that potential mature students do not regard the current student loans arrangement as a disincentive.

The amount of student loan that a graduate repays each month and the period of time over which repayments are made are linked to the level of the borrower’s income and the amount borrowed. Under the support arrangements introduced in 2001-02, many students who will be liable to pay the endowment when they graduate will have been eligible to receive the Young Students Bursary in place of part of their loan entitlement. Most liable graduates will have borrowed less under the current arrangements than they would have under the previous system. No student should have borrowed more.

The rate of interest applied to student loans is equal to the annual change in the retail price index. This is applied to maintain the value of the amount borrowed in real terms.

1990 - 9.8%.

1991 - 5.8%

1992 - 3.9%

1993 - 1.2%

1994 - 2.3%

1995 - 3.5%

1996 - 2.7%

1997 - 2.6%

1998 - 3.5%

1999 - 2.1%

2000 - 2.6%

2001 - 2.3%

2002 - 1.3%

2003 - 3.1%

2004 - 2.6%

Loans have been an integral part of an affordable student funding system since 1990. We do, however, appreciate that some students from less affluent backgrounds may be concerned about accruing debt while they study. That is why, in 2001, the Executive introduced the non-repayable Young Student’s Bursary (YSB) to replace part of the loan to which eligible young full-time students from low-income backgrounds are entitled. This will reduce the level of debt which suchstudents would otherwise have on graduation.

I recently announced that, from 2005-06, the maximum annual support provided through YSB will be increased by 11% to £2,395. The parental income threshold has also been increased. These changes mean that approximately 3,000 additional students will now be able to receive the bursary and approximately 20,000 will receive the maximum bursary.

Student loans were accounted for on a cash basis until 2000-01. From 2001-02 they were accounted for entirely on a resource accounting basis. To facilitate the change, both cash and resource accounts were published in 1999-2000 and 2000-01.

In the year ended 31 March 2000, student loans were accounted on the basis of the Scottish Executive share of the Student Loan Company loan book, giving a balance of £458.554 million. In the year ended 31 March 2001 the Scottish Executive’s share of these loans was accounted for on the basis of the loans balances of students domiciled in Scotland. This meant that the opening balance of student loans was recalculated to be £420.880 million.

Education policy is set by ministers. We work with others, local authorities, teachers organisations and many others, including philanthropic foundations who are committed to improving the quality of Scottish education, to deliver these policies. The precise contribution of other bodies varies according to each circumstance, but philanthropic foundations have already shown they can bring new ideas as well as financial resources, which help achieve educational improvements.

Eligibility is restricted because the number of eligible teachers is controlled by the Scottish  Higher Education Funding Council to match teacher workforce requirements.

It would be possible to extend eligibility to include all teacher education institutions elsewhere in the UK, but we would not be able to limit eligibility to individual institutions. We would therefore be opening ourselves to an indeterminate number of applications, for the most part without teaching vacancies being available.

We regularly review eligibility for the induction scheme, but it is extremely unlikely it will ever be extended to guarantee places to individuals graduating from elsewhere in the UK.

Discussions are on-going with the Home Office to explore possibilities open to Scotland within the work permit system and wider UK immigration policy. Areas of mutual interest include implementation of the Fresh Talent: Scotland Scheme. Under the scheme, international students from outside the European Economic Area who graduate from Scottish institutions will be allowed to live and work in Scotland for up to two years after graduation. We are also discussing ways in which we can promote Fresh Talent through UK schemes, such as the Highly Skilled Migrants Programme, which aim to assist those who wish to live and work in the UK. In addition, we are considering with Work Permits UK ways in which we can better promote the work permit system to Scottish employers.

Scotland has been successful in attracting international students for a number of years. According to the most recent figures available, there were 7,486 students from Asia studying at Scottish higher education institutions in 2002-03. It is estimated that around 390 of those students were studying for the MBA qualification. The Fresh Talent initiative was launched in February 2004 and it is not possible to report on its impacts in relation to student recruitment atthis stage.

The Scottish Executive has no functions in relation to UK immigration policy. UK Visas have confirmed that the information requested is not held centrally.