The Graduate Endowment (Scotland) Regulations 2001

Explanatory Note

(This note is not part of the Regulations)

These Regulations are the first regulations made under section 1 of the Education (Graduate Endowment and Student Support) (Scotland) Act 2001 with respect to the graduate endowment. They specify which graduates are liable to pay the graduate endowment and the amount of the graduate endowment and when it is to be paid, and make provision for loans to be made available to graduates for the purposes of paying the graduate endowment.

Graduates who fall into one of the categories of person listed in Schedule 1 are liable to pay the graduate endowment. Graduates are liable graduates for the purposes of these Regulations if, on the first day of the first academic year of the relevant course, they are ordinarily resident in Scotland, have been ordinarily resident in the United Kingdom for the preceding three years and are settled in the United Kingdom within the meaning of the Immigration Act 1971 (regulation 3(3) and Schedule 1, paragraph 2). Graduates will also be liable if they are European Economic Area migrant workers, or the spouses or children of such workers (Schedule 1, paragraphs 3 5), persons granted exceptional leave to remain in the United Kingdom (Schedule 1, paragraph 6) and persons who are nationals, or children or step-children of nationals, of a member state of the European Community (Schedule 1, paragraph 7).

Graduates falling into one of these categories are liable to pay the graduate endowment in respect of the first full-time course of higher education which they undertake commencing on or after 1st August 2001 which lasts for a period of at least 3 academic years (or, where the relevant course is undertaken as part of a continuous programme of higher education, at least 2 academic years) (regulation 3(1)). Provision is made in respect of the calculation of the relevant period in cases where graduates have changed course or institution prior to completing their course (regulations 3(3) and (4)). However, graduates who have undertaken a continuous programme of higher education are not liable to pay the graduate endowment if that continuous course commenced prior to 1 August 2001 (regulation 3(2)).

Certain categories of graduate are exempt even though they meet the criteria outlined above. Graduates are exempt from liability for the graduate endowment if on the relevant date for the course in respect of which they would otherwise be liable to pay the graduate endowment, they are aged 25 or over, are married or have supported themselves out of their earnings for periods aggregating not less than 3 years (regulation 4(1)). They will also be exempt if, at any time during that course, they are eligible for a students' allowance in respect of their being a lone parent or a disabled student, or, if they are a national of a European Community member state or a child or step-child of such a national, would be have been so eligible if they had been ordinarily resident in Scotland (regulation 4(2).

Courses at a higher level in preparation for a higher diploma or certificate or in preparation for a qualification from a professional body and courses of postgraduate studies are not courses of higher education are not treated as courses of higher education for the purposes of these Regulations (regulation 5(1)). Similarly, degree courses in nursing or midwifery and certain other subjects related to medicine are not treated as courses of higher education (regulation 5(2) and Schedule 3). Accordingly, graduates who have undertaken these courses shall not be liable for the graduate endowment in respect of their attendance on them.

Liable graduates and persons whom the Scottish Ministers reasonably consider may become liable graduates are obliged to provide certain information to the Scottish Ministers on request. So too are institutions providing any course of higher education (regulation 6).

The amount of the graduate endowment which a liable graduate will have to pay is fixed on the first day of the first academic year in which the graduate undertook the course of higher education in respect of which they are liable to pay the graduate endowment (regulation 7(1)). For courses commencing in the period from 1st August 2001 to 31st July 2002, the amount of the graduate endowment is £2000 (regulation 7(3)). Provision is made for increasing the amount of the graduate endowment on an annual basis by an amount equal to inflation (regulation 7(4) and (5)).

A liable graduate is bound to pay the full amount of the graduate endowment to the Scottish Ministers by 1st April in the year following the end of the academic year in which they finish their course (the “due date”) (regulation 8(1)). However, a liable graduate may apply to the Scottish Ministers for a loan in respect of their liability to pay the graduate endowment, and if they do so by the due date, they are under no liability to pay the graduate endowment on that date (regulation 8(2)).

All liable graduates are eligible for a loan to meet their liability for the graduate endowment (regulation 9(2)). A liable graduate must apply for such a loan by completing a questionnaire and supplying supporting evidence and information if required to the Scottish Ministers (regulations 10 and 11). The amount of the loan is the amount of the graduate endowment for which the liable graduate is liable (regulation 12). The Scottish Ministers are required to apply the full amount of any loan made to discharge the liability of the liable graduate to pay the graduate endowment. The use of the loan is limited to this purpose, and no part of the loan is paid to the liable graduate or to any other person (regulation 13(1) and (4)). The loan is to be applied for its purpose on the due date or as soon as reasonably practicable after the application has been made (regulation 13(2) and (3)).

Provision is made for the interest which the loans will bear, which is calculated daily and compounded monthly (regulation 14). The rate is identical to that paid on other student loans.

Loans in respect of liability to pay the graduate endowment paid or payable after the commencement of the sequestration of the graduate’s estate do not form part of their estate and accordingly cannot be claimed by the trustee. The graduate will not be discharged from liability to repay loan payments made after sequestration when he is discharged under or by virtue of section 54 or 75(4) of the Bankruptcy (Scotland) Act 1985.