HC Deb 09 February 2001 vol 362 c764W
Mr. Matthew Taylor

To ask the Secretary of State for Education and Employment what the net present value is of loans to students in financial year 1999–2000 under the current loan system; what rate of interest would be required to increase the net present value of student loan debt by £0.7 billion; and if he will make a statement. [148138]

Mr. Wicks

The net present value of the estimated £982 million income contingent loans issued in 1999–2000 to students domiciled in England and Wales is estimated to be £590 million. The nominal rate of interest required to increase this by £0.7 billion is estimated to be around 13 per cent. These figures are based on new estimates of the resource cost of income-contingent loans, which is now estimated to be 40 per cent. of the face value of the loans.

The net present value given here is different from that quoted in the Department for Education and Employment's annual accounts for 1999–2000 because the latter includes mortgage-style as well as income contingent-style loans. Loans issued to students domiciled in Scotland and Northern Ireland are a matter for the Scottish Parliament and Northern Ireland Assembly respectively.

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