Question to the Department for Education:

To ask the Secretary of State for Education, what assessment her Department has made of the potential impact of increased student loan balances on graduates’ access to mortgages and savings.

The size of one’s outstanding student loan is not a barrier to accessing a mortgage and savings. Student loan balances do not appear on borrower credit records, meaning the total size of the student loan debt is not considered in a borrower mortgage application. Monthly student loan repayments will be considered alongside other living costs as part of the affordability check for mortgage applications in the same way as any other fixed monthly outgoings, but monthly repayments are not linked to the size of the outstanding loan.

Student loan repayments are linked to income, not to the amount borrowed or interest applied. Repayments are made at a constant rate of 9% above the earnings threshold. Borrowers earning under the earnings threshold, are not required to make repayments. Any outstanding loan including interest built up, is cancelled at the end of the loan term with no detriment to the borrower, and debt is never passed on to family members or descendants.

The government appreciates that making student loan repayments has an impact on individuals, and this is why there are unique protections for borrowers and the finance system is heavily subsidised by taxpayers.