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Student Loans

Oral Answers to Questions — Business, Innovation and Skills – in the House of Commons at 9:30 am on 10th April 2014.

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Photo of Paul Blomfield Paul Blomfield Labour, Sheffield Central 9:30 am, 10th April 2014

What recent estimate he has made of the resource accounting and budgeting charge on student loans.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

We currently estimate the RAB charge to be around 45%. The estimate changes frequently in the light of new economic forecasts and will continue to change.

Photo of Paul Blomfield Paul Blomfield Labour, Sheffield Central

Back in the days when the Minister was confidently predicting that the RAB charge would not rise above 32%, writing in The Independent in October 2012, he described a RAB charge of 38% as the worst outcome for the taxpayer. How does he describe a RAB charge of 45%?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

What we have achieved with our higher education reforms is significant savings to the taxpayer and extra income going to our universities. That is the right combination.

Photo of Liam Byrne Liam Byrne Shadow Minister (Business, Innovation and Skills)

The whole House will want to join me in congratulating Toni Pearce on her re-election as president of the National Union of Students. Figures this morning from the Sutton Trust and the Institute for Fiscal Studies show that Toni’s generation will now be paying off their student loans into their 50s. Will the Minister get to the Dispatch Box and confess that this student debt system is now not only unsustainable, but unfair? Does the Conservative party have any plans to raise the £9,000 fee in the next Parliament?

Photo of David Willetts David Willetts Minister of State (Universities and Science)

Let us be absolutely clear what today’s IFS report shows. It shows that people on lower earnings throughout their working lives are going to pay back less. That is a deliberate feature of our reforms which means that they are fairer and more progressive than the system we inherited from the Labour Government. Meanwhile, people who earn a lot during their working lives as a result of going to university will pay back more. That is what we intended with these reforms, and that is what the IFS shows we are delivering.