Students: Loans
The question
To ask the Secretary of State for Education, whether her Department has made an estimate of the potential revenue raised by introducing a voluntary discounted settlement scheme for Plan 2 student loan borrowers whose loans are not projected to be repaid in full.
Answered by Treasury
One of the fundamental principles of student loans is that repayments are income contingent and only due when the borrower is earning over the relevant repayment threshold. Outstanding debt, including interest accrued, is cancelled at the end of the loan term with no detriment to the borrower. These protections exceed what discounted settlement schemes typically offer to borrowers.
Borrowers already have the ability to make additional, voluntary repayments towards their student loan, with no penalty, if they wish to do so.
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