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Students: Loans

Volume 475: debated on Tuesday 29 April 2008

To ask the Secretary of State for Innovation, Universities and Skills pursuant to the answer to the hon. Member for North Devon of 18 March 2008, Official Report, columns 84-6WS, on Education (Student Support) Regulations, how much in (a) student loans and (b) maintenance grants was paid to prisoners undertaking full-time higher education courses in each of the last 10 years for which figures are available; and how much has been repaid to the Student Loans Company by such prisoners since it was established. (196706)

In his written statement on 7 February 2008, Official Report, columns 85-86WS, on the Education (Student Support) Regulations, the Secretary of State announced that he was amending the student support regulations to disallow prisoners who were also full-time students from receiving financial support for maintenance, thereby removing the long-standing provision which had allowed prisoners to claim such support. In a further written statement on 25 March 208, Official Report, column 6WS, he announced that an investigation showed that 154 individual prisoners had received some form of maintenance payment while a full time student since 1998. In total, prisoners received £570,000 in maintenance loans and £160,000 in maintenance grants over that period. The investigation also showed that assessments for student support were carried out in accordance with the rules that applied at the time. There was also evidence of some maintenance payments made to prisoners between 1990 and 1998.

The following table shows the amounts in maintenance loans and maintenance grants paid to prisoners undertaking full-time higher education courses in each of the last 10 years for which figures are available.

Academic year

1998/99

1999/2000

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

2007/08

Student Loans1

12,675

19,912

13,602

19,879

39,860

41,587

60,285

105,437

143,564

108,670

Maintenance Grants2

0

0

0

0

0

0

9,189

24,999

68,704

54,816

Total

12,675

19,912

13,602

19,879

39,860

41,687

69,474

130,436

212,268

163,486

1 Student Loans consist of pre-1998 mortgage-style loans; income contingent loans introduced in 1998 and transitional loans (1998/99).

2 Maintenance grants consist of the former Higher Education grant in 2004/05 and 2005/06 and maintenance grant from 2006/07.

Repayment of student loans by prisoners is the same as for other borrowers. For income contingent loans, borrowers start to repay in the April after they graduate or withdraw from their course. Repayment is linked to income and repayable through the PAYE or Self Assessment Tax system and is at 9 per cent. on earnings above £15,000 a year. Interest paid is linked to the rate of inflation, so in real terms what is paid back is equivalent to what was borrowed. The repayments to the Student Loans Company by these borrowers and posted to their accounts as at 19 March, 2008 is shown in the table as follows.

Loan type

Amount repaid (£)

Mortgage Style loans

3,566

Income Contingent Repayments (covers repayments to end March 2007).

22,091

Total repaid

25,657

The figures do not include payments that have been made but not yet credited to Borrowers’ accounts. Prisoners will typically take longer to start repayments than other students. For example, some prisoners will complete their course several years before release; and there will therefore be a longer period between prisoners finishing their studies and starting work and earning above the annual threshold.