Review urged on student fees

The government has agreed to a fundamental review of its student loans and tuition fees policy after facing a barrage of attacks at a meeting of senior party figures including the Prime Minister yesterday.

Party officials were said to be taken aback by the strength of feeling among Labour members against student loans and the payment of tuition fees which can leave students up to £15,000 in debt after their degree course.

At the meeting of the National Policy Forum, the organisation used by the Government to maintain links with the party, Ministers were told that the policy was in danger of turning young people away from the party and had been one of the most negative aspects of the recent general election campaign.

Sources at the forum said that the attack was led by Bill Morris, the leader of the Transport and General Workers Union, who told the meeting of 170 party figures that the student loans policy was placing an intolerable burden on young people.

He pointed out that 85 per cent of students left university with debts and that many had to work up to 15 hours a week to make ends meet. Critics of the Government's policy said that having to work the extra hours would hamper studying.

Estelle Morris, the Education Secretary, who was at the meeting yesterday, said that she would monitor the situation to see if there was any evidence that loans and tuition fees were putting young people from poorer backgrounds off going to university.

It is expected that the negative mood of the forum will be reflected in documents to be published this week which will go forward for debate at Labour's annual conference in the autumn. Several senior government figures are known to be angry at the imposition of tuition fees on top of loans and some softening of the policy is now expected.

According to the National Union of Students, British graduates leave university with an average debt of £12,000. In London, this can rise to £15,000.

Professor Alan Lewis, of the University of Bath, said that student loans were dangerous because they 'legitimised' borrowing among the younger generation.

'You can think of the borrowing experience as a learning process and as an opportunity to improve economic competence. But the opposite view is that student loans basically tell students that it's OK to start adult life with considerable amounts of debt,' he said recently.

A survey by Barclays bank showed that six out of 10 graduates owed money to the Student Loan Company, the same number as owed money to their bank.