Funding Higher Education
Debate between Gary Streeter and Gordon Marsden(6 years, 9 months ago)
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Mr Streeter
It would be a little bit late, but I thank the hon. Gentleman for the thought.
Repayment of loans is a shared responsibility between the Student Loans Company and Her Majesty’s Revenue and Customs. The Student Loans Company receives all its funding from the UK Government and the devolved Administrations. Therefore, the system is based on the student owing however much money he or she needed to borrow to get through university and gradually paying it back during their working lifetime. Perhaps not surprisingly, 93% of all students in England take up student loans.
The total amount of debt that an average student who completes a three-year undergraduate course will owe has now risen to around £50,000, according to the Institute for Fiscal Studies. That sum will include just under £6,000 in interest accrued during the period of study, at a rate of up to 6.1%. A student who has taken out a loan will begin repaying 9% of their income when they are earning higher than the repayment threshold, and any unpaid debts are written off after 30 years. Broadly, that is the system.
The Government announced in October 2017 that the repayment threshold on student debts would be raised from £21,000 to £25,000, commencing from April 2018. At the same time, the fee cap was frozen at £9,250.