To ask the Secretary of State for Innovation, Universities and Skills how many and what proportion of people making repayments of student loans were also claiming the working tax credit or child tax credit in the latest period for which figures are available; and how many and what proportion were higher rate income tax payers. (166864)

The information requested is not held centrally.

To ask the Secretary of State for Innovation, Universities and Skills how many students have entered into individual voluntary arrangements since their introduction. (166887)

The Government’s student finance package is designed to ensure that finance should not be a barrier to a higher education course. Student loans from the Government are not like commercial loans: interest is paid at the rate of inflation, so in real terms students only pay back what they borrowed. For income contingent loans available since 1998, repayment is linked to earnings and borrowers only repay if their earnings are over £15,000; from April 2012 they will be able to take up to five years ‘Repayment Holiday’ and those taking out a student loan from 2006 have their debt cancelled after 25 years.

During the passage of the Enterprise Act in 2002 there was a growing awareness about student loan borrowers declaring themselves bankrupt. There was a rise in the number of bankruptcies/Individual Voluntary Agreements (IVAs) notified in 2003. In addition, one of the effects of the Enterprise Act itself was to reduce the period of discharge from bankruptcy from three years to one. Provisions were therefore included in the Higher Education Act 2004 to prevent student loans being written off on bankruptcy. Currently student loans are not exempt from IVAs.

The increase in student loan borrowers with bankruptcies and IVAs should be seen in the context of the increases in the general population. Figures from the Insolvency Service show that between 2002 and 2006 the number of individual bankruptcies in England and Wales more than doubled; the number of IVAs increased seven-fold.

Until 2004 IVAs and bankruptcies were not recorded separately in SLC data. After the change in legislation, only IVAs are recorded, as student loans are excluded from bankruptcy debts and are not written off on discharge from bankruptcy.

Available data are shown in the following tables.

Early indications suggest the numbers of IVAs are reducing after 2006.