Increase in student loans announced

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The Independent Online

Students who choose to study at private universities are to see their loans doubled, it was announced today.

Ministers said student loans would rise from £3,000 to up to £6,000 a year for those starting courses at privately-run institutions next year.

This includes places like Buckingham University and some privately-run specialist music colleges.

The move is likely to be seen as a bid by the Government to encourage people to study at private universities that are not publicly-funded or subject to student number controls.

It comes as the majority of publicly-funded universities are announcing plans to raise tuition fees to £9,000 from next year, putting pressure on the student finance system.

Universities Minister David Willetts also announced that grants for students will increase next year.

But while many students will see their finance packages - grants and loans combined - rise slightly, new students from families with an annual income of around £50,000 will see their funding cut.

The University and College Union (UCU) warned that the Government's new student financial support system could hit the poorest students the hardest.

It said that the debt owed by these students for tuition fees could rise from nothing under the present system to up to £17,250 at the end of a three-year undergraduate degree for students starting courses next year.

This is because the increases in maintenance grants - which are given to students from poorer backgrounds - do not match the increase in fees.

At the moment, tuition fees are around £3,000 and from next year they will go up to £9,000.

But grants for the poorest students will only be £3,250, coupled with loans of £3,875.

UCU general secretary Sally Hunt said: "Students from the poorest backgrounds will see their debt on graduation increase the most, which is another example of just how unfair the whole fees policy is.

"Nick Clegg and David Cameron can talk all they like about social mobility and a lack of students from certain backgrounds at some universities, but tripling fees and massively increasing the debt of poorest students is only going to exacerbate the problem."

The union also raised concerns about taxpayers' money being given to students to cover their fees at private institutions.

"We only need to look at America to see that for-profit higher education is fraught with danger for students and taxpayers alike and, at the very least, needs to be properly regulated," Ms Hunt said.

Mr Willetts said: "We are focusing support on those students who need it most because no-one should be deterred from higher education on financial grounds.

"Continuing students and new students will both benefit from more generous maintenance rules while part-time students and distance learners will be entitled to new support to cover the costs of tuition.

"The new system will be more responsive to student choice. As a first step, we are making sure students at alternative providers can benefit from the more generous tuition loan system in place from 2012/13."