Mature student drop-outs worry vice chancellors. Drop-out rates are still outpacing the growth in student numbers, a new survey shows. Drop-outs rose by 10 per cent to 54,000 in the 1994/95 academic year, when total student numbers rose by 7 per cent.

The report, the Committee of Vice Chancellors and Principals' Survey of Student Financial Support 1995, is based on returns from 75 per cent of United Kingdom universities (all numbers were rounded to the nearest thousand).

Rising drop-out rates were singled out as a warning sign about the health of higher education by former higher education minister George Walden as the House of Commons gave the Student Loans Bill its third reading. Mr Walden said it was important for both sides of the House to read the signs and come up with an appropriate funding solution.

The CVCP report shows that mature students, those over 21, are particularly likely to leave their courses without completing them. They make up a third of full-time home undergraduates and account for 40 per cent of the drop-outs. They are also more likely to apply for help from access funds. Students aged over 25, who make up 16 per cent of students, were responsible for 45 per cent of bids for support.

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Diana Warwick, chief executive of the CVCP, said: "This is supposed to be the European Year of Lifelong Learning. Yet our survey shows that mature students returning to learning in mid-career are among the most severely disadvantaged students in this country. It serves to highlight the basic unfairness of student support."

The report shows a sharp increase in drop-outs due to examination failure. These were up 20 per cent compared with the previous year, reaching 21,000. Non-academic drop-outs were up by about 5 per cent, slightly below the rate of growth in numbers. But analysis of trends over the four years since 1991/92 (see diagram), based on successive CVCP surveys, shows that academic and non-academic departures have grown at comparable rates over this period.

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Jim Murphy, president of the National Union of Students, said that examination failures often have non-academic causes: "We have been saying for a long time that when people have money worries and are forced to do part-time work to support themselves it will have a knock-on effect on their studies".

The report shows that applications to access funds fell 3,000 to 74,000, but attributes this to better advice on eligibility. Of these 55,000 were successful, a similar success rate to 1993/94, receiving Pounds 18 million. The administrative bill of Pounds 2 million is met by the universities.

Further information on drop-outs should become available through research commissioned by the Higher Education Funding Council for England. The council will announce next month which of ten applicants has been commissioned but the timescale of the study has yet to be settled.

The Loans Bill received its third reading on Wednesday in spite of opposition claims that it was "building on the weaknesses of the existing system".

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Labour higher education spokesman Bryan Davies said the measure lacked any support within the system, and his frontbench colleague Stephen Byers warned against committing public money to subsidising private involvement in the loans scheme.

Mr Byers said the decision to delay implementation until 1997 had already cost the system 100m and would lead to public money being committed to private companies in advance of a General Election which Labour might win. He asked how the government hoped to recoup the money and attacked government refusal to say which, or how many, companies had been approached.

Higher education minister Eric Forth said there was no precedent for stalling the implementation of legislation or subsidies because of an impending election, that competition between lenders would guarantee students a fair deal and that disclosing company names would be contrary to standard practice.