Explanatory note

These Regulations, which come into force on 1st August 1991, aremade under section 1 of and Schedule 2 to the Education (Student Loans)Act 1990 (“the Act”).

Conditions of eligibility for a loan are prescribed. A student mustbe attending a full- time course, a part-time initial teacher trainingcourse or a partly full-time and partly part-time initial teachertraining course (regulation 4(1)(a)). The student must satisfy theordinary residence conditions in the Schedule to the Regulations or inthe Students' Allowances (Scotland) Regulations 1987; or at any timebefore or during the academic year be a refugee (or a spouse or child ofa refugee) who has been ordinarily resident in the British Islands sincebeing recognised as a refugee (regulation 4(1)(b)). A loan is onlyavailable if the student agrees with the loans administrator thatpayment of the loan shall be by direct credit and has signed a directdebit mandate (regulation 4(1)(c)). A loan is available only if thestudent enters into an agreement for it during the twelve month periodbeginning on 1st August in which the relevant academic year begins(regulation 4(1)(d)). A student is not eligible if he is aged 50 or overbefore the start of the course; is training to be a nurse and eligiblefor a bursary from public funds under the Project 2000 scheme; isfollowing a course under the Articled Teachers Scheme; is in default ona previous loan made under the Act; or if he obtained a loan when aminor and refused to ratify the loan agreement on reaching 18(regulation 4(2)). No student is eligible for more than one loan in anyyear (regulation 4(4)).

The Secretary of State is empowered to designate courses at privatesector institutions for the purposes of section 1 of the Act (regulation5). (A student at a private sector institution is eligible for a loanonly if his course is designated.)

Rates of loan are prescribed, differing according to whether thestudent is in the final or another year of the course, and according towhether he lives in the parental home, or away from the parental homeand studies in London or elsewhere. A one year course for thePostgraduate Certificate of Education is not treated as a final year(regulation 6).

From 1st September 1991 loans bear interest at the same percentageas the percentage increase in the Retail Prices Index between June 1990and June 1991, thus maintaining the value of the outstanding amount ofthe loan in real terms (regulation 7).

A borrower will start to repay his loan — by direct debit(unless otherwise agreed) — on 1 April after leaving hiscourse, whether completed or not. Repayments will be made in 84 monthlyinstalments if the student has received a loan in respct of 5 academicyears or more, and in 60 monthly instalments in all other cases.Provision is made for calculating the amount of monthly repayments. Theadministrator may require a defaulting borrower to repay the outstandingdebt immediately or, in prescribed circumstances, may relax therepayment requirements of the loan agreement in the case of such aborrower (regulation 9).

The loans administrator is empowered, in the case of borrowersreceiving specified disability-related benefits, to relax the terms ofrepayment by allowing a later startdate or deferred repayments or alonger period for repayment than provided for in regulation 8(regulation 10).

A borrower may defer repayments for one year if he satisfies theloans administrator that his gross income for specified months does notexceed £1055. When assessing gross income no account is takenof specified disability-related benefits. The borrower may resumerepayments during the deferment period. Interest accrues on the loanduring any deferment period (regulation 11).

A borrower’s liability is cancelled if the borrower dies; or if aborrower, without being in breach of any obligation: attains the age of50 (or the age of 60 if he was aged 40 or over when the most recent loanagreement was made) or has had his most recent loan outstanding for 25years (regulation 12).

The governing bodies of institutions at which eligible students areattending courses are under a duty to issue, check and certifyeligibility questionnaires and forms, and issue application forms. Theduty does not apply in relation to an academic year after 30th June inor immediately following that year. They are also required to notify theloans administrator if a certified student ceases to be eligible (otherthan by completing the course) or if a person fraudulently obtains orattempts to obtain a loan; keep appropriate records and copies ofdocuments for inspection; and acknowledge receipt of eligibility andapplication forms and provide brief details of those issued (regulation13).

The Schedule specifies conditions of eligibility. Generally speakinga person is eligible for a loan if he has been ordinarily resident inthe British Islands (ie the United Kingdom, the Channel Islands and theIsle of Man) for a period of three years ending with the first day ofhis course.