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Students: Loans

Volume 474: debated on Wednesday 26 March 2008

To ask the Secretary of State for Innovation, Universities and Skills how many people who graduated in (a) 2001, (b) 2002, (c) 2003, (d) 2004, (e) 2005, (f) 2006 and (g) 2007 have repaid the whole of their student loan. (188038)

Available data are shown in the table.

English domiciled borrowers who have fully repaid their student loan (up to February 2008) by loan type1

Date repayments due to start2

Mortgage-style loan

Income-contingent loan

All loans3

April 2002




April 2003




April 2004




April 2005




April 2006




April 2007




April 2008




1 Figures are rounded to the nearest 100. Publicly-owned student loans.

2 Repayment begins from the April following the year of graduation, when income reaches

the threshold.

3 Borrowers with both types of loan may be counted twice.

4 = nil or less than 50


Student Loans Company

Borrowers who graduated in 2007 are not required to begin repaying their loans until April 2008; consequently the April 2008 figures in the table cover only those borrowers who have chosen to fully repay their loans before any repayments are due. The table reflects the change from mortgage-style to income-contingent loans. The figures relating to 2001 graduates, who started to repay their loans from April 2002, are significantly higher because the normal period for repaying mortgage-style loans is five to seven years.

Borrowers with up to four mortgage-style loans repay over five years when their income exceeds the repayment threshold; those with five or more loans repay over seven years. The threshold for borrowers with mortgage-style loans is 85 per cent. of national average earnings, currently £25,287 from 1 September 2007. Borrowers are able to apply for deferment of repayments if their income is below this. Income-contingent loans replaced mortgage-style loans from 1998. Borrowers with income contingent loans repay at a rate of 9 per cent. of earnings above £15,000 a year. Repayments are usually collected through the tax system by employers, in the same way as income tax and national insurance contributions. Self-employed borrowers make repayments through the self assessment system.

To ask the Secretary of State for Innovation, Universities and Skills how many cases of multiple applications from individuals for student loans were recorded in each of the last five years for which figures are available. (192338)

The responsibility for assessing student support applications in England rests with local authorities and therefore complete information is not centrally available about the number of multiple applications identified. From 2009-10 the SLC will assess all new applications for student support, and records will be held centrally.

Where local authorities suspect fraud at the application stage, they will not process the application until they are completely satisfied with the documentary evidence. Where payments have been made, the local authorities may prosecute the students, or report the matter to the police for prosecution, and recover any overpayments.

The Student Loans Company (SLC) run a range of checks using industry-standard software systems which pick up potential multiple applications. Payments are suspended by the SLC until students contact their local authority and the case is thoroughly checked. Since 2004, 388 cases such cases have been identified, though not all are fraudulent applications.

To ask the Secretary of State for Innovation, Universities and Skills if he will make an estimate of the cost to the public purse of raising the student loan repayment income threshold to (a) £18,000, (b) £20,000, (c) £21,000, (d) £22,000, (e) £23,000, (f) £24,000 and (g) £25,000; and if he will make a statement. (196031)

The estimated additional resource cost for each £1,000 increase in the current £15,000 repayment threshold is an initial £200 million (for existing loans) plus an ongoing cost of £80 million per year (for new loans). Increasing the threshold to £25,000 would therefore cost an estimated £2 billion plus £800 million per year.

The income threshold is one of the main features of the income contingent loan scheme. This protects borrowers when they need it as they only pay their loan back once they earn over the threshold. Borrowers currently repay nothing until they earn over £15,000. This strikes the right balance, making payments affordable to the individual and student loans affordable to the public purse. We are committed to maintaining the repayment threshold at £15,000 until 2010 when we will review it.