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Education: Britain Introduces A New Regime Of Students' Loans

London, 14 October 1998 (RFE/RL) -- A recent European Union study found that British universities, particularly elite institutions like Oxford and Cambridge, offer the best education available in any EU country.

But Britain has long compared badly with other Western countries because it provided higher education to a far smaller percentage of its population. A 1978 study found that the proportion of the population studying for a first university degree was barely half that in France and about one-sixth the level in the U.S. And Britain had proportionately fewer university students than any European country except Turkey.

But recent years have seen a huge expansion in student numbers and also in the number of British universities. This has had major implications for the funding of students.

The narrow Oxford-Cambridge monopoly has broken down to the point where the United Kingdom now has 80 universities, compared to 50 only a decade ago. There has been a massive expansion of full-time students to more than half a million, a trend encouraged by the decision of former Prime Minister John Major (who never went to university) to convert many technical colleges into universities.

To cope with the surge in the number of students, Britain is moving away from its traditional system of government-provided student grants toward a new regime of student loans. It is requiring students and parents to shoulder more of the cost burden.

Basic state support is still in place. Students can get financial backing to help pay for their tuition and their living costs while at college (for the duration of a first degree course, typically three or four years). This support is provided by Local Education Authorities (LEAs) funded by the taxpayer. To qualify for such awards, the student needs to live in the LEA area.

The LEAs in most of the UK (Northern Ireland is a special case) are drawn from elected local councils, which have many other responsibilities aside from education.

For a first university degree, almost all UK students will automatically have their tuition fees paid. This money is paid directly by the LEA to the college. Students can also qualify for a maintenance grant to pay for their accommodation, food and heating, but not everyone gets one.

For those coming straight out of lower school, parents' income will be assessed and, if they earn above a certain limit, the student will be entitled to only a limited amount of support, or to nothing. This is meant to help the children of blue-collar workers or deprived families.

One survey showed that 42 percent of parents were either unwilling or unable to find the money to support their children. As a result, many thousands of students are living beneath what even the government considers to be a minimum level. In fact, by the time they graduate, many students are heavily in debt.

The basic annual LEA grant for living costs available to students in 1998-99 is $3,800 -- higher in London-- or $3,000 when a student lives at his or her parents' home. Students say that since Britain has some of the highest living costs of any EU country, this is not adequate. Many have to work part-time.

The government has signaled that these maintenance grants are to be frozen in the future. Students are being encouraged to take out government-funded loans from an independent bank, the Student Loans Company. It offers low-interest loans that have to be repaid when the student gets a job with what is considered to be an adequate salary.

UK higher education is administered by a partnership between local government authorities and the central government. But the balance of influence between the partners is changing, with local governments steadily losing power.

In England and Wales, funding for higher education is provided in the form of government grants, allocated on the advice of higher-education funding councils. These bodies are composed of academics, civic leaders, businessmen and the like. In Scotland, higher education is under the direct control of the government minister responsible for Scotland, who allocates funds and can issue directives to colleges.

Government departments of education have ultimate responsibility for universities and colleges. But universities have a considerable and jealously guarded degree of independence. They appoint their own staff, decide on their own admissions policy, and traditionally have academic freedom in teaching and research.

Critics say that this tradition of independence has been eroded in recent years by the allocation of government funds for specific subjects, and a need to seek commercial sponsors for projects.

But almost all universities receive central government funding. The money is allocated among them on the advice of Higher Education Funding Councils, made up of prominent academics and community leaders, rather than by direct decision of the government.