Question to the Department for Education:

To ask the Secretary of State for Education, if she will make an assessment of the potential merits of revising the thresholds for determining the interest rate on student loan repayments for people living abroad in the context of local taxation levels.

The repayment of student loans, including the setting of interest rates applied to student loan plan types for borrowers in the UK or overseas, is determined by the Education (Student Loans) (Repayment) Regulations 2009 (as amended).

Overseas repayment thresholds are calculated using World Bank price level index (PLI) (which is used to compare differences between the cost of living in the UK and other countries), not the tax rates of countries of residence. This means that if a borrower is resident in a country calculated as having a lower cost of living than the UK, the repayment threshold applied to their loan will be lower than if they are residing in the UK. The country bandings and thresholds are reviewed annually.

Using a recognised measure of the relative cost of living in different countries ensures that borrowers residing in different countries are assessed in a fair, transparent and consistent way.