Students: Loans
Business, Innovation and Skills
Gordon Marsden (Blackpool South, Labour)
To ask the Secretary of State for Business, Innovation and Skills what the total combined loan (a) value and (b) repayment plus interest will be for an access to higher education student who takes out the maximum further education student loan and the maximum higher education student loan and subsequently earns (i) £21,000, (ii) £25,000, (iii) £30,000 and (iv) £35,000 per year until the loan is repaid from 2013-14; and if he will publish any modelling his Department has commissioned on these costs.
John Hayes (Minister of State (Further Education, Skills and Lifelong Learning), Business, Innovation and Skills; South Holland and The Deepings, Conservative)
The expected maximum loan for an Access to a Higher Education (HE) course is £4,000, and the course is expected to last for one year. We have assumed that the learner starts the Access to HE course in 2013/14. If the same person subsequently enrols on a three year HE course starting in 2014/15, the maximum amounts borrowed for the three years to pay for student fees could be around: £9,600, £9,900 and £10,300 and for London rate maintenance loans could be around: £8,200, £8,500 and £8,800. These amounts assume all 2012/13 fee and loan rates increase with inflation each year and that the student does not receive any fee waivers. This gives a total loan value of £59,300.
We have assumed that: the requested income scenarios are given in 2016 terms; that the incomes increase with general earnings growth beyond that year; and that the learner remains in full-time employment for the whole of the 30 year period. Then the total amounts borrowed, the total repayments over the repayment period of 30 years, and the total gross earnings for that period would be as shown in the following table:
| £ | |||
| Initial earnings | Amount borrowed | Amount repaid after 30 years | Total income received in those 30 years (nominal) |
| £21,000 | 59,300 | 0 | 1,441,600 |
| £25,000 | 59,300 | 24,700 | 1,716,200 |
| £30,000 | 59,300 | 55,600 | 2,059,500 |
| £35,000 | 59,300 | 86,500 | 2,402,700 |
The Government have published a calculator for students to work out their repayments which is accessible at the following link:
http://www.studentfinance.direct.gov.uk/portal/page?_pageid=153,4680136&_dad=portal&_schema=PORTAL