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%

Debt sale subsidy payments by the Scottish Executive to 2003-04 in respect of student loans total £62,527,000. However, the cost of these payments is offset in the Executive’s balance sheet against the debt sale subsidy provision, created when the loans were sold, and thus are a nil cost annually.

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.

Future repayments depend on a wide range or factors, and are therefore difficult to forecast. In the past year work has been carried out to improve the student loans repayment model. There has been extensive testing, though, as with all models, it will be subject to further analysis and refinement.

The table summarises the model’s results for the loan repayments, at different thresholds, from April 2006. From April 2005, the threshold will be £15,000.

Loan Repayments (to the Nearest £5 Million)

Threshold	2006	2007	2008
£10,000	75	105	145
£15,000	35	60	90
£19,000	20	35	55
£25,000	5	10	20

Note: Student loans are treated as outwith total managed expenditure, which means that the net costs are met by HM Treasury (gross student loan advancesless student loan repayments). This income is the repayment of a debtor balance within the balance sheet. This “income” (loan repayments) and the loan advances are shown in the Budget Act to meet the requirements of section 1 of the Public Finance and Accountability (Scotland) Act 2000. At the year-end these figures are reflected within the balance sheet and not within the Operating Cost statement.

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.

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 information requested is given in table 8 on page 56 of the Student Loans Company Ltd’s annual report for 2002-03 published by the Student Loans Companyin November 2003, copies of which are available in the Parliament’s Reference Centre (Bib. number 31394).

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.

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