Question to the Department for Education:
To ask the Secretary of State for Education, for what reasons the Student Loan repayment rate is calculated using gross salary levels.
The repayment of student loans is governed by the Education (Student Loans) (Repayment) Regulations 2009 (as amended). The amount that a borrower is required to repay is calculated on the basis of income subject to National Insurance contributions (for UK-resident PAYE borrowers) or income subject to tax (for borrowers required to complete a Self Assessment Tax form or borrowers resident overseas). This provides equal treatment of borrowers. An individual’s effective tax rate can be dependent on a variety of factors, such as investment income or pension contributions, and does not provide a simple link to earnings.