Question to the Department for Education:

To ask Her Majesty's Government, further to the Written Answer by Lord Parkinson of Whitley Bay on 22 March (HL14145), what plans they have to assess the annual cost of removing interest payments from the student loans of (1) health, and (2) social care, workers.

There are no current plans to assess the annual cost of removing interest payments from the student loans of health or social care workers.

The student loans system is designed to protect borrowers, including those who are employed in health and social care. Repayments are made based on a borrower’s monthly or weekly income, not the interest rate or amount borrowed. Only those who earn above the repayment threshold are required to make repayments. The repayment threshold is £27,295 per year from April 2021, or its monthly or weekly equivalent. Any outstanding debt, including interest accrued, is written off after 30 years with no detriment to the borrower.

The vast majority of students who do not fully pay back their loans (an estimated 75% of Plan 2 loans given out in the 2019/20 academic year) would see no reduction in their lifetime repayments, because this part of their borrowing is already written off: https://explore-education-statistics.service.gov.uk/find-statistics/student-loan-forecasts-for-england/2019-20.

Our income-based repayment system means that those who benefit the most from their education repay their fair share. The repayment system also helps to ensure that costs are split fairly between borrowers and the taxpayer. In total, the government subsidises around 50% of the overall cost of higher education, making a conscious investment in the skills and people of this country.