UNIVERSITY attendees will have to repay student loans from September next year. The Education Department announced today that the changes were necessary because of the increase in student numbers as well as tuition fees and States financial constraints.

‘The Education Department would prefer that the States found a way of continuing to offer higher-education awards, under the current system, by increasing the department’s budget,’ said deputy Education minister Wendy Morgan.

‘However, the Treasury and Resources Department has indicated that this is not possible and the rest of the Education Department’s budget is also under significant pressure.

‘It has, therefore, been forced to consider alternative ways of meeting the need.’

Students who started a course before 1 April this year will continue to receive grants under the current system until the end of that course.

They will not have to take loans, even if the course continues after 2006/7.

All students who receive support for courses that commenced after 1 April will receive grants under the current system for the academic years 2006/7 and when loans are introduced, they will not be asked to repay those grants.

From September 2007, the new funding and loan arrangements will apply both to students who enter full-time further and higher education outside Guernsey in that month and to those who are continuing courses which they entered at any time after April 2006.

This change will particularly affect those students starting their courses in September this

year.

Students will not be required to repay any part of the loan until the completion of their course.

It is intended that the loan interest rate will be variable, at the Bank of England base rate plus 1%.

‘The department is announcing its proposals today, which it will take to the States in November, so that students starting higher education in September 2006 will have an idea of what it might cost them,’ said Deputy Morgan.

‘However, the proposals will be subject to acceptance by the States and the enactment of the necessary legislation.

‘The department would like all young people to have the opportunity to gain the qualifications, life skills and experiences associated with being able to pursue a course of higher education.

‘I believe the student loan proposals represents the only way of achieving this goal.’

Students who are due to start higher education this year can contact the grants section at the Education Department now.

‘We would ask that other students and parents wait until 7 August to contact the department so that we can give those students starting higher education this autumn a priority.’

Three elements will fund students’ higher education:

n A States contribution – the States will continue to provide some grant funding, which will be targeted at students from the lowest-income families.

n A parental contribution – this will be assessed in the same way as the current system but increased by inflation, i.e. parents on the highest incomes will be required to contribute the full value of the maintenance allowance plus up to the equivalent in today’s money of £5,950 towards tuition fees.

The income assessment and allowance method used to calculate the parental contribution will for now remain the same as the current system.

* How student loans work: students will be asked to contribute towards their tuition fees to close the funding shortfall.

Instead of asking students and families to finance this contribution immediately, the department will offer students a loan, at favourable terms, which is not repayable until the end of the course.