The Act

3 The Act provides for payment of a “graduate endowment” by a “graduate” in respect of the “higher education benefits” afforded to him or her. “Graduate” and “higher education benefits” are defined in section 1(5) of the Act.

4 The details of the endowment, including the description of graduate liable to pay it and the amount and manner of payment, are to be set out in regulations made by the Scottish Ministers. Such regulations may also exempt certain categories of individual and certain courses.

5 The Act imposes a duty on the Scottish Ministers to include, in the budget proposals made for each financial year, provision for the income raised by the payment of the graduate endowment in that year to be used for the purposes of student support provided by Scottish Ministers.

6 The Act amends the Education (Scotland) Act 1980, so that regulations governing the payment of student allowances and loans by the Scottish Ministers can be extended to allow payments to be made to distance learning students and to former students. It also amends the Local Government Finance Act 1992 so as to exempt students who share accommodation with people other than students from liability for council tax.

Section 1: The graduate endowment

7 This section establishes the graduate endowment by requiring payment by certain graduates who are as specified in regulations, in respect of the higher education benefits they have been afforded. Liable graduates will also have to meet certain other qualifying criteria which are to be set out in regulations made by the Scottish Ministers. The regulations will specify that the graduate endowment is payable in respect of the first full-time degree undertaken by an individual after 1 August 2001, unless that degree is part of a continuous programme of study (which will also be defined in regulations) commencing before that date. The regulations will also include provisions dealing with the length of time to be spent on the degree before liability arises and residence conditions.

8 This section also empowers the Scottish Ministers to make regulations:

9 The statutory instrument containing the first set of regulations made under this section will be required to be approved by a resolution of the Scottish Parliament. Thereafter, instruments will be subject to the negative procedure.

Section 2: Graduate endowment: use of income

10 This section provides that, when making budget proposals to the Scottish Parliament for a particular financial year, the Scottish Ministers must include provision that the income arising from the graduate endowment for that year will be used for the purposes of student support. “Budget proposals” and “student support” are defined in section 2(2) of the Act.

Section 3: Financial support for students

Section 73(f) of the Education (Scotland) Act 1980 provided that the Scottish Ministers may make regulations concerning— “the payment of allowances or loans to or in respect of persons attending courses of education”.

11 Use of the word “attending” may have been taken to suggest some degree of physical attendance on the course. Section 3 of the Act therefore amends this section to provide that the Scottish Ministers may make payments of allowances or loans to or in respect of persons who are “undertaking” or “who have undertaken” courses of education. It also makes two consequential changes. The purpose of the main amendment is two-fold. First, it enables allowances and loans to be paid to students on distance learning courses who are not “attending” courses of education. This will allow the Scottish Ministers to extend the loans for part-timers scheme and the Disabled Students' Allowance to distance learning students. Second, it enables loans to be made to individuals to enable them to fulfil their liability to pay the graduate endowment.

Section 4: Council tax: students to be exempt from liability

12 Where a student lives alone or shares a property with other students, the student is currently exempt from any charge for council tax. However, where a student shares a residence with a non-student, the student is jointly and severally liable for the council tax bill in respect of the property, notwithstanding that the student is disregarded in calculating the bill.

13 Section 4 of the Act amends the relevant provisions of the Local Government Finance Act 1992 in such a way that students will no longer be jointly and severally liable for council tax.