Business, Innovation and Skills written question – answered at on 8 November 2010.
To ask the Secretary of State for Business, Innovation and Skills what estimate he has made of the age at which student loans of (a) £7,000, (b) £10,000 and (c) £12,000 will be paid off by graduates in each income decile following implementation of the proposals in the Browne Review of higher education funding.
The Government have now set out their proposals for higher education and student finance in Parliament following the Browne Review of Higher Education and Student Finance. The Government have broadly accepted Lord Browne's proposals on repayment while adapting the system to make it more progressive.
We have estimated the number of years students are likely to be in repayment if the proposals in the Browne Review were to be implemented.
Graduates move into repayment from the April after they leave university. The following table gives the number of years that we estimate graduates will be in repayment, though in each year there will be many graduates who will be eligible to repay as they have left university while benefiting from the low income protection and not actually making any repayments.
Graduates who are still in repayment after 30 years have the balance of their loan cancelled and are considered to be in repayment for 30 years. Graduates who fully repay their loan on graduation are considered to be in repayment for 0 years. Graduates who have their loans cancelled for death or disability are considered to be in repayment for the number of years until their loan is cancelled.
This has been based on a student on a three-year course taking out a loan in each year.
Average number of years in repayment | |||
Lifetime earnings decile | £7,000/year | £10,000/year | £12,000/year |
10 | 10 | 13 | 15 |
9 | 15 | 20 | 23 |
8 | 16 | 21 | 24 |
7 | 17 | 23 | 26 |
6 | 21 | 25 | 27 |
5 | 23 | 26 | 28 |
4 | 26 | 28 | 29 |
3 | 27 | 29 | 29 |
2 | 26 | 27 | 27 |
1 | 22 | 22 | 22 |
The figures are affected by the inclusion of graduates who have their loans written off for death or disability, particularly in the lowest decile as they are only in repayment until their loan is written off. As a result they are in repayment for a shorter period and they bring the average down.
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