Student Finance

Education and Skills written question – answered on 12th February 2004.

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Photo of Vincent Cable Vincent Cable Shadow Chancellor of the Exchequer, Liberal Democrat Spokesperson (Treasury)

To ask the Secretary of State for Education and Skills what discussions he has held with the Chancellor on the relationship between projected student debt and household debt.

Photo of Charles Clarke Charles Clarke Secretary of State, Department for Education and Skills

There is no relationship between student loans and household debt. Student loans are repaid on an income-contingent basis. We intend that graduates only pay 9 per cent. of their income beyond £15,000 per year. If it falls below £15,000, their repayments stop. Student loans are subsidised by the Government with no real rate of interest—so the burden does not increase, however long the repayment period. The Government propose to write off any outstanding student loan amount after 25 years.

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