Students: Loans

Business, Innovation and Skills written question – answered on 18th June 2014.

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

To ask the Secretary of State for Business, Innovation and Skills what projections his Department has made of the future (a) face value and (b) carrying value of the student loan book.

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

The information is as follows:

(a) We estimate the cash, or face, value of ICR student loans to follow approximately this profile going forwards.

Value of loan book in real terms
  £ billion
2014-15 70
2015-16 80
2016-17 90
2017-18 100
2018-19 110
2019-20 120
2020-21 130
2021-22 140
2022-23 150
2023-24 160
2024-25 170
2025-26 180
2026-27 190
2027-28 200
2028-29 210
2029-30 220
2030-31 230
2031-32 240
2032-33 250
2033-34 260
2034-35 260
2035-36 270
2036-37 280
2037-38 280
2038-39 290
2039-40 300
2040-41 300
2041-42 310
2042-43 320
2043-44 320
2044-45 330
2045-46 330
2046-47 330
2047-48 330
2048-49 330
2049-50 330
Value of loan book in nominal terms
  £ billion
2014-15 70
2015-16 80
2016-17 100
2017-18 110
2018-19 130
2019-20 150
2020-21 170
2021-22 190
2022-23 210
2023-24 230
2024-25 250
2025-26 270
2026-27 300
2027-28 320
2028-29 350
2029-30 380
2030-31 410
2031-32 440
2032-33 470
2033-34 500
2034-35 530
2035-36 570
2036-37 600
2037-38 640
2038-39 670
2039-40 710
2040-41 750
2041-42 790
2042-43 830
2043-44 870
2044-45 920
2045-46 960
2046-47 1,000
2047-48 1,030
2048-49 1,070
2049-50 1,100

These estimates assume that fees will increase in line with inflation from 2016 onwards. These forecasts also take account of the freeing up of student number controls in the autumn statement, increases in loan take-up rates, demographic changes over time and updated earnings modelling.

(b) We estimate the current carrying value of the student loan book, which is used in the BIS accounts. However, we do not forecast the future carrying value of the loan book, as this is not required for the purposes of accounting or budgeting. Our estimate of the carrying value for loans when they are issued is based on the RAB charge, which we currently estimate is around 45%.

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