My noble Friend the Parliamentary Under-Secretary of State for Education, Baroness Barran, has made the following written ministerial statement.
Today I am announcing the introduction of regulations to allow plan 2 (undergraduate), plan 3 (postgraduate) and plan 5 (undergraduate) student loan interest rates to be capped automatically each month, where they would otherwise exceed comparable prevailing market rates. This ensures ongoing compliance with requirements in primary legislation and removes the need to lay time limited regulations, as has previously been the case, whenever student loan interest rates would otherwise have exceeded comparable prevailing market rates.
I am also announcing a change to the calculation of the overseas fixed instalment repayments for plan 1 student loans—available to new borrowers from 1998 to 2012. Fixed instalments are due by student loan borrowers residing overseas who fail to submit their income details to the Student Loans Company (SLC) with the result that income-contingent repayments cannot be made. The amended fixed instalment rate will increase, and will now be equivalent to the monthly repayments of a plan 1 student loan borrower earning twice the median working age graduate salary in England. This removes a perverse incentive whereby higher earning borrowers residing overseas may have chosen not to submit their earnings information to the SLC in order to reduce their monthly payments.