Students: Loans
The question
To ask the Secretary of State for Education, for what reason interest rates are applied to student finance loans for women on maternity leave.
Answered by Janet Daby
Student loans are subject to interest, to ensure that those who can afford to contribute to the full cost of their degree can do so.
The student finance system protects borrowers in cases where they see a reduction in their income for whatever reason, including women on maternity leave or any other person on parental leave. Student loan repayments are based on a borrower’s monthly or weekly income, not the interest rate or amount borrowed, and no repayments are made for earnings below the relevant student loan repayment threshold. Any outstanding debt, including interest accrued, is written off at the end of the loan term with no detriment to the borrower.
A full equality impact assessment of how the student loan reforms may affect graduates, including detail on changes to average lifetime repayments under Plan 5, was produced and published in February 2022, and can be accessed at: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.
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