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Student Loans Company: Finance

Volume 475: debated on Tuesday 29 April 2008

To ask the Secretary of State for Innovation, Universities and Skills (1) how much money was retained by the Student Loans Company for eventual repayment to graduates in each month of the last year for which figures are available; (200279)

(2) how much money has been refunded to graduates by the Student Loans Company (SLC) in the form of (a) refunds of overpayments for people who have extinguished their debt, (b) refunds for people who have overpaid but who continue to owe money to the SLC and (c) refunds for any other reason in each of the last five years.

The Student Loans Company (SLC) does not retain funds to repay student loan borrowers, but refunds any overpayments from the cash repayments it receives from borrowers. Refunds include any interest due, which is awarded at the same rate of interest as that charged on student loans (matching the Retail Price Index). The net repayments collected by the SLC are paid back to the Government on a monthly basis.

Refunds to borrowers who continue to owe money to the SLC may arise for a number of reasons—mainly due to administrative errors or because their overall annual income is below the annual repayment threshold (£15,000) but income at some paydates in the year exceeds the weekly or monthly threshold.

The amounts refunded to borrowers by the SLC for the five years commencing 2002-03 are set out in the following table. Refunds in 2006-07 represented 1.7 per cent. of the repayments collected by SLC totalling £529,800,000.

£

Financial year

Type of refund

2002-03

2003-04

2004-05

2005-06

2006-07

Borrowers who have extinguished their debt

764,124

2,324,109

4,314,058

6,796,132

8,184,667

Borrowers who have overpaid but continue to owe money

1,051,751

873087

1,468,336

1,558,074

1,039,750

Total

1,815,875

3,197,196

5,782,394,

8,354,206

9,224,417

Notes:

1. Includes income contingent (ICR) loans and publicly owned mortgage style (MS) loans.

2. Domicile—England for ICR loans and England and Wales for MS loans.

3. It was not practical to isolate other refunds from the category of borrowers who continue to owe money.