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Students: Loans

Volume 496: debated on Wednesday 9 September 2009

To ask the Minister of State, Department for Business, Innovation and Skills what percentage of people with student loans have paid back the full amount within the first two years of leaving higher education since loans were introduced. (287685)

Income Contingent Loan borrowers become liable to repay their student loan in the April after leaving their course. This is known as the statutory repayment due date (SRDD). Borrowers will normally only start making repayment once their income is above the £15,000 threshold and they repay 9 per cent. of their income over the threshold level.

It is not possible to calculate precisely how many borrowers have paid back the full amount within the first two years of leaving higher education. However, as at 31 March 2009, Student Loan Company (SLC) figures show that 2.4 per cent. of ICR borrowers had repaid in full before their SRDD. A further 2.5 per cent. had repaid their loan within two years of their SRDD which may be almost three years after students have left their courses.

Providing the information for those with mortgage-style loans (MS) is not possible. In 1998, when the SLC migrated these data, only the number of borrowers who had fully repaid was recorded, not the number of financial transactions which would enable us to accurately calculate the percentage who had repaid within two years.

To ask the Minister of State, Department for Business, Innovation and Skills (1) how many people in each age group had not repaid their student loans in the (a) City of Southampton and (b) non-metropolitan County of Hampshire area on the latest date for which figures are available; (288392)

(2) how many people in each age group had begun repayments of student loans in the (a) City of Southampton and (b) non-metropolitan County of Hampshire area on the latest date for which figures are available.

The information requested is shown in the following table:

Income-Contingent loan borrowers, March 20091

Numbers who have not yet made a repayment

Numbers who have made a repayment

Total

Southampton2

Age3

Less than 20

0

0

0

20 to 24

340

500

840

25 to 29

360

1,470

1,830

30 to 39

180

440

620

40 to 49

70

130

200

50 and over

30

30

70

Total

980

2,570

3,560

Hampshire2

Age3

Less than 20

30

20

40

20 to 24

2,570

5,290

7,870

25 to 29

2,220

13,830

16,050

30 to 39

600

1,490

2,090

40 to 49

370

770

1,140

50 and over

180

240

420

Total

5,980

21,640

27,610

1 Table covers income-contingent loan borrowers liable to repay with known repayment or non-repayment status.

2 Local authority where the borrower was resident at the time of application for student finance. This does not indicate current residence.

3 Age at the end of the last tax year for which repayment/non-repayment information has been posted, mainly end of tax year 2007-08.

Source:

Student Loans Company

Borrowers become liable to repay their loans in the April after they leave their course. Repayments are at the rate of 9 per cent. of earnings above the £15,000 threshold. Those earning less than the threshold are not liable to repay. Those not yet repaying may include borrowers who have gone on to further study or are doing voluntary work.

To ask the Minister of State, Department for Business, Innovation and Skills how much has been deducted from the salaries of individuals in each income group for student loan repayments in the (a) City of Southampton and (b) non-metropolitan County of Hampshire area in the last 12 months. (288394)

The information is available in the following table.

Student Loans PAYE Deductions Tax Year 2007-081, 3

Numbers who have had a deduction from earnings under PAYE

Amount deducted from earnings under PAYE

Average amount deducted

Southampton2

Less than £15,000

550

60,000

110

£15-20,000

560

150,000

270

£20-25,000

470

320,000

670

£25-30,000

300

310,000

1,050

£30-35,000

140

200,000

1,490

£35-40,000

80

140,000

1,880

Over £40,000

90

230,000

2,690

Total

2,190

1,420,000

650

Hampshire2

Less than £15,000

4,040

470,000

120

£15-20,000

4,160

1,190,000

290

£20-25,000

4,330

2,930,000

680

£25-30,000

2,880

3,060,000

1,060

£30-35,000

1,350

1,990,000

1,480

£35-40,000

710

1,330,000

1,870

Over £40,000

1,040

3,100,000

2,990

Total

18,500

14,070,000

760

1 Tables cover deductions by PA YE from income-contingent loans. Excludes Self Assessment deductions. Tables cover deductions which HMRC has notified to SLC by 31 March 2009. There will be further deductions notified for tax year 2007-08.

2 Local authority where the borrower was resident at the time of application for student finance. This does not indicate current residence.

3 Note that earnings in the tax year is not the same as annual salary. A borrower who starts work late in the tax year on an annual salary above £15,000 will have deductions made but may have earnings during the tax year of less than £15,000.

Source:

Student Loans Company

Borrowers become liable to repay their loans in the April after they leave their course. Repayments are at the rate of 9 per cent. of earnings above the £15,000 threshold.