We expect students who entered higher education in the 2006-07 and 2007-8 academic years to graduate with an average level of debt of around £15,000.
Student loans have very different features to most commercial loans, Graduates only repay once they are in work and only when their annual income reaches £15,000. Interest is charged at the rate of inflation, so students only pay back in real terms the amount they originally borrowed.
In July we announced plans to introduce greater flexibility in the repayment of student loans by allowing borrowers to take repayment breaks of up to five years.
A generous package of support is available to students, particularly those from low income households. In 2006-07 over half of eligible full-time students received a full or partial maintenance grant of up to £2,700, From 2008-09 onwards, the minimum threshold (of household income) for a full maintenance grant of up to £2,835 per year will be extended from £17,500 a year to £25,000 a year; with a partial grant available up to an income threshold of £60,005. This will mean that two thirds of all eligible students in England entering higher education in the academic year 2008-09 are expected to be entitled to a full or partial non-repayable grant—compared to just over half now.