Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the potential impact of continually accrued student loan interest on students when they pause their studies due to unforeseen circumstances.

UK higher education creates opportunity, is an engine for growth in the economy, and supports local communities. The department is committed to supporting the aspiration of every person who meets the requirements and wants to go to university.

Student loans are subject to interest to ensure that those who can afford to do so contribute to the full cost of their degree.

Interest is charged from the first payment of the student loan is made until the loan has been repaid in full or cancelled, with interest added to the principal balance each month. Interest will continue to accrue even if a student suspends or withdraws from their course, including for students pausing their studies due to unforeseen circumstances. Borrowers will be liable to repay after leaving study only when earning over the relevant student loan repayment threshold.

After study, unlike commercial loans, student loans carry significant protections for borrowers. Regular student loan repayments are based on a borrower’s monthly or weekly income, not the interest rate or amount borrowed, and no repayments are made for earnings below the relevant student loan repayment threshold. Any outstanding debt, including interest built up, is written off at the end of the loan term with no detriment to the borrower.