Government adds 10,000 higher education places

LONDON (Reuters) - The government said on Monday it would make an extra 10,000 higher education places available this year and would cut the length of time students can offset the repayment of their education loans to help foot the bill.

Support costs for extra places in courses such as science, technology, engineering and maths will be paid for by the state, but the government said there would be no impact on the public finances because the funding will come from existing budgets.

The optional five-year repayment holiday announced in 2007 which let students offset their degree loans will be reduced to two years.

Universities will not be given any additional teaching grants.

"It is for universities to manage their own admissions and we are confident that many will want to offer higher quality places to students on this basis," business minister Peter Mandelson said in a statement.

"Our expansion of higher education is more important now than ever before, as we continue to invest in developing a highly skilled workforce that is well placed to win the jobs the future economy will offer."

Economists and lobby groups have warned that the recession is making it particularly hard for school leavers to find work and some have urged the government to do more to help young people avoid long-term unemployment.

"We still face a summer crisis," said Conservative university and skills spokesman David Willetts. "There is nothing for those whose A levels stop them from applying for STEM (science, technology, engineering and maths)."

Lobby group Universities UK welcomed the additional places but cautioned against favouring certain types of degree at the expense of others.