Students: Loans
The question
To ask the Secretary of State for Education, what assessment her Department has made of the potential merits of pausing student loan interest from accruing while new parents are in receipt of statutory maternity pay.
Answered by Janet Daby
Student loans are subject to interest to ensure that those who can afford to do so contribute to the full cost of their degree.
The student finance system protects borrowers if they see a reduction in their income for whatever reason. This includes those in receipt of statutory maternity pay, 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 built up, 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 found here: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.
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