Students to receive monthly pay-outs in bursaries shake-up

Published on Thursday 22 December 2005 13:57

HARD-UP students are to benefit from a shake-up of the loans and bursary system which will see cash paid out to them in monthly installments.

Lifelong Learning Minister Nicol Stephen said today that money handed out from the 2007 academic year onwards would be paid every month rather than the current arrangement where loans and the Young Students' Bursary are paid out in three instalments at the start of each term.

Campaigners for the changes today welcomed the move and said it would allow people to keep on top of their money and reduce the risk of students being left penniless long before the end of term.

Further education students at colleges such as Edinburgh's Telford College are already paid each month.

Mr Stephen also announced that future responsibility for student loans will transfer from the Student Loans Company to the Students Awards Agency for Scotland (SAAS) to create a one-stop shop for people looking for support.

He said: "We recognise that money management is a big issue for many students. I want to ensure that the distribution of payments for living costs support meets the needs of Scottish students studying here.

"Whilst Further Education students are paid on a monthly basis, HE students can run into budgeting difficulties when paid only three times a year, with the payments being linked to the first day of the term."

He added: "This arrangement began at a time when the academic year was generally divided into three equal terms. However, as more institutions move away from this pattern, we thought it appropriate to consult on whether the current payment model for loans and bursaries is the right one to best support students.

"As a result, we have decided that a system of monthly payments - with some front-loading of support - will benefit the majority of students by helping them to better manage the funds available to them. This will take effect from academic year 2007-08, provided that I am satisfied that all the necessary IT requirements are in place and have been fully tested."

Students can currently borrow up to 4095 a year in student loans, depending on their parents' income.

In Scotland, students do not pay tuition fees - and instead pay a graduate tax of 2000 at the end of their course, which they can pay as a lump sum or by instalments.

Students under the age of 25 can receive a bursary of up to 2150 a year, if their family income is less than 10,740 and mature students can get cash towards childcare, housing and travel costs.

National Union of Students Scotland President Melanie Ward said: "NUS Scotland has been calling for a move to more flexible student loans payments for a number of years now, so we welcome the forthcoming introduction of monthly payments.

"The new system will be much more suitable for most students and will assist with planning and budgeting."

Keith Houghton, Chairman of the National Association of Student Money Advisors (NASMA) UK, said: "NASMA fully supports what the Executive has agreed to do.

"The new system will be flexible enough to allow a larger payment to help students meet initial costs and provides the opportunity to budget more realistically."