§ Mr. Andrew Smith
To ask the Secretary of State for Education and Science, further to his reply of 19 June,Official Report, column 33, if he will publish a revised version of annex E to the White Paper on student loans to include estimates of administrative costs, interest subsidy, default and write off costs, on the assumption of (a) 80 per cent. take-up, (b) 90 per cent. take-up and (c) 100 per cent. take-up.
I refer the hon. Member to my previous answer of 21 March at columns497–99, which showed the effect of various take-up assumptions on the estimates in annex E of Cm. 520. Those estimates made allowance for the cost of an illustrative 10 per cent. default rate, and of writing off debts in cases of death or of deferment beyond the age of 50. Those estimates also allowed for the cost of the zero real interest rate, which has the effect, as compared with a higher interest rate, of reducing the size of repayments. The administrative costs mentioned in my 293W right hon. Friend's statement on 19 June at columns 21–22 were based on there being 1.15 million accounts in 1995. It is estimated that the scheme will grow eventually to some 2.5 million accounts in the second decade of the next century, but it is not expected that administrative costs will increase in proportion.