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Students: Loans

Volume 476: debated on Monday 19 May 2008

To ask the Secretary of State for Innovation, Universities and Skills how many student loans have been written off in each of the last five years, broken down by the cause of the write-off. (200281)

Borrowers domiciled in England and Wales whose loans have been written off—mainly on statutory grounds of age, death and disability—are at Table 1. Of 2.5 million loans at the end of 2006/07, the numbers of loans written off during that year represented around 0.1 per cent. of the total.

Statutory grounds for student loans to be written off (for both mortgage-style (MS) and income-contingent (ICR) loans unless otherwise stated) are:

Upon the death of the borrower, or if the borrower is in receipt of a disability related benefit and permanently unable to work;

On age grounds. MS loans with no arrears are written off when the borrower reaches the age of 50 (or 60 if the borrower was aged over 40 when he/she last borrowed). ICR loans issued before 2006/07 are written off at age 65;

For ICR loans issued after 2006/07, 25 years after students become liable to repay their loan.

Minor, residual loan balances can also be written off on other, non-statutory grounds.

Table 1: Publicly-owned income-contingent and mortgage-style loans which have been written off (rounded to the nearest 10)

Financial Year

Age1

Deceased

Disabled

Other2

2002-03

140

540

110

100

2003-04

250

560

90

160

2004-05

480

430

90

60

2005-06

580

800

120

210

2006-073

1,050

700

140

1,620

1 Loan cancellations on grounds of age have risen due to the increasing age of borrowers since the first loans were taken out (from 1990 onwards). The rise also reflects the increasing volume of loans. 2 So far, with the exception of 2006-07 the majority of write-offs take place on statutory grounds. The increase in this category in 2006-07 reflects a bulk clearance of cases which took place that year. 3 2006-07 data are provisional.