Students: Loans
The question
To ask the Secretary of State for Education, whether she has made an assessment of the potential merits of launching a comprehensive review of student loan interest rates.
Answered by Janet Daby
Student loans are subject to interest so that those who can afford to do so contribute to the full cost of their degree. To consider both students and taxpayers and ensure the real value of the loans over the repayment term, interest rates are linked to inflation.
Interest rates on student loans do not affect monthly repayments made by borrowers. Regular repayments are based on a fixed percentage of earnings above the applicable student loan repayment threshold. Any outstanding debt, including interest built up, is written off after the loan term ends (or in case of death or disability) at 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 under the previous government in February 2022 and can be found here: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.
Verbatim has judged this answer against the question that was actually asked — answered, partly answered, or evaded. Sign in to see the verdict →