Students: Loans

Innovation, Universities and Skills written question – answered on 1st April 2008.

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Photo of Stephen Williams Stephen Williams Shadow Secretary of State (Innovation, Universities and Skills)

To ask the Secretary of State for Innovation, Universities and Skills how many people with student loans who graduated in (a) 2001, (b) 2002, (c) 2003, (d) 2004, (e) 2005, (f) 2006 and (g) 2007 have yet to make any repayments of a student loan.

Photo of Bill Rammell Bill Rammell Minister of State (Lifelong Learning, Further and Higher Education), Department for Innovation, Universities and Skills

Available data are shown in the following table.

English domiciled borrowers who have not yet made repayments on their student loans by loan type( 1)
Cohort (repayment start)( 2) Mortgage-style loan Income-c ontingent loan( 3) All loans( 4)
April 2002 9,900 33,900 43,800
April 2003 3,100 56,300 59,400
April 2004 800 71,600 72,400
April 2005 200 103,800 104,000
April 2006 100 146,700 146,800
April 2007(5) 100 n/a n/a
n/a = Not available.

(1) Figures are rounded to the nearest 100. Publicly-owned student loans.

(2) Repayment begins from the April following the year of graduation, when income reaches the threshold.

(3) Annual repayment information is passed to the SLC after the end of the tax year, to update borrowers' records. Some of the borrowers covered in the table will have made repayments via their employers recently that have not yet been reflected in their SLC accounts, and therefore appear not to have made repayments.

(4) Borrowers with both types of loan may be counted twice.

(5) Details of income-contingent loan repayments collected through the tax system are passed to the SLC after the end of the financial year to update borrowers' accounts. Therefore data are not yet available on repayments by 2006 graduates who became liable to begin repaying in the tax year 2007-08.


Student Loans Company (SLC)

Borrowers who graduated in 2007 are not required to begin repaying their student loans until April 2008. Income-contingent loans replaced mortgage-style loans from 1998; the table reflects this change. It also shows that many people who have recently left university have not yet begun to repay, but those in older cohorts are now repaying.

Borrowers with up to four mortgage-style loans repay over five years when their income exceeds the repayment threshold; those with five or more loans repay over seven years. The threshold for borrowers with mortgage-style loans is 85 per cent. of national average earnings, currently £25,287 from 1 September 2007. Borrowers are able to apply for deferment of repayments if their income is below this.

Borrowers with income contingent loans repay at a rate of 9 per cent. of earnings above £15,000 a year. Repayments are usually collected through the tax system by employers, in the same way as income tax and national insurance contributions. Self employed borrowers make repayments through the self assessment system.

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