New debt plan review for students

● Plans unveiled independent report ● Average debt doubles to £ 12,000

Scottish students could find themselves falling into thousands of pounds more debt under“minimum income” plans unveiled in a review of funding.

University and college graduates would be guaranteed an income of £ 8,100 a year under the scheme unveiled yesterday.

But the it suggests offering more loans, sparking a political backlash.

Scottish students face the prospect of falling into thousands of pounds more debt under“minimum income” proposals unveiled by an independent review of their funding.

University and college graduates would be guaranteed an income of £ 8,100 a year under the plans unveiled yesterday, but this is likely to be secured through more loans.

Opposition parties have called for more bursary support after the S NP came to power a decade ago pledging to wipe out student debt. Average debt has since doubled to about £ 12,000.

The proposals were set out in the report entitled “A New Social Contract for Students: Fairness, Parity and Clarity ”. The report was published by a review group headed by Virgin Money boss Jayne - Anne Gadhia.

She said: “The establishment of a Minimum Student Income is an essential step forward in delivering fairness, and helping to ensure that money is no longer a reason for dropping out of courses.

“Non-re payable bursaries will continue to be focused on those from the lowest income backgrounds. And students can, if they so wish, access high quality student loans– on the best terms in the UK.”

University students can cur- rently borrow up to £ 5,750 in Scotland, with grants of up to £ 1,875 for youngsters from low income families.

There view recommends a“hybrid” approach which would see college students allowed to borrow £ 4,050 and get grants of the same amount, depending on their circumstances.

University students would be allowed to borrow £ 6,225 with grants of up to £1,875. This would cost taxpayers an extra £ 16 million a year.

But the group is also calling on ministers to look at an alternative “50/ 50” option which would see university students given the same treatment as their college counterparts with loans and grants each of up to £ 4,050. This would cost taxpayers an extra £ 123m, but had the backing of th es tudents leaders and the trade union Unison. The review also calls for a debt “write- off ” for students moving from college to university.

Education minister Shirley Anne Somerville said the Scottish Government will consider the findings before making a decision.

Labour education spokesman Iain Gray said :“The SNP came to power in 2007 promising to abolish student debt, instead it has doubled during the decade the SNP has been in office. The SNP has slashed grants and bursaries, forcing students to turn to loans with the poorest students racking up the highest debts. The SNP should start to fix what it has got wrong by delivering bursaries for those that need them.”