Loans still being shunned by most students

SIX out of ten students are still resisting government loans four years after the system was introduced, figures released yesterday show, writes Fran Abrams.

Although more than 1 million students have taken out loans since 1990, just 40 per cent of eligible undergraduates took them up in the past academic year, according to a Department for Education statistical bulletin.

More than one-third of graduates were able to defer their repayments, which should begin in the April after graduation, because they were earning less than pounds 14,000. The loan has risen each year since 1990 by at least the rate of inflation, but the grant has been frozen and will be cut this year by 10 per cent.

Despite the relatively low take-up, the number of students taking out loans is rising slowly. In 1991-92, 36 per cent of eligible students had loans and in 1992-93, the figure was 41 per cent. Almost half of those living away from home had loans, compared with one in five of those living with their parents.

Student loan applicants spend more on housing, food, insurance and entertainment than those who did not apply for loans.

Tim Boswell, the further and higher education minister, said the figures were encouraging and showed the loans scheme was a success. But Lorna Fitzsimons, president of the National Union of Students, said: 'Students would rather take out overdrafts with their banks, and borrow from friends and families than contact the bureaucratic nightmare of the Student Loans Company.'

Eight schools received permission to open sixth forms yesterday as John Patten, Secretary of State for Education, published guidelines for those wishing to extend education to 16-18 year-olds.

Schools must show that their plans would extend choice, preserve quality, respond to demand and secure value for money.