Students: Finance
The question
To ask the Secretary of State for Education, what assessment she has made of the potential impact of trends in the level of student debt on the financial stability of people in Yeovil constituency.
Answered by Josh MacAlister
Unlike commercial loans, student loans carry significant protections for borrowers. Student loan repayments are linked to income, not to the amount borrowed or interest applied. Repayments are made at a constant rate of 9% above the earnings threshold, and if a borrower’s income drops below the repayment threshold, or they are not earning, their repayments will stop.
Any outstanding loan, including interest built up, is cancelled at the end of the loan term with no detriment to the borrower, and debt is never passed on to family members or descendants. However, the government appreciates that making student loan repayments does have an impact on individuals. This is why there are unique protections for borrowers and the finance system is heavily subsidised by taxpayers.
The department does not hold information on financial stability for Yeovil.
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