For students who entered higher education in the 2006/07 academic year, we expect their average level of debt on graduation to be around £15,000.
Student loans have very different features to most commercial loans. Graduates only repay once they are in work and only when their annual income reaches £15,000. Interest is charged at the rate of inflation, so students only pay back in real terms the amount they originally borrowed.
In July we announced plans to introduce greater flexibility in the repayment of student loans by allowing borrowers to take repayment breaks of up to five years.
A generous package of support is available to students, particularly those from low incomes, who receive maintenance grants of up to £2,700 per annum. From 2008/09 onwards, around two-thirds of new full-time entrants to higher education will be eligible for a full or partial grant—compared to just over a half now.