HC Deb 12 February 2004 vol 417 cc1581-2W
17. Mr. Blizzard

To ask the Secretary of State for Education and Skills if he will reduce the level of payments of university tuition fees for graduates who take up and remain in modestly paid jobs. [154526]

Alan Johnson

The income-contingent repayment scheme for student loans already recognises the needs of graduates who take and remain in poorly paid jobs. Repayments will be 9 per cent. of salary above £15,000 from 2005, and will stop whenever the graduate's salary falls below that threshold. In addition, we propose to write off the outstanding loan after 25 years—that too will benefit graduates in low paid jobs.

18. Dr. Cable

To ask the Secretary of State for Education and Skills what discussions he has held with the Chancellor on the relationship between projected student debt and household debt. [154527]

Mr. Charles Clarke

There is no relationship between student loans and household debt. Student loans are repaid on an income-contingent basis. We intend that graduates only pay 9 per cent. of their income beyond £15,000 per year. If it falls below £15,000, their repayments stop. Student loans are subsidised by the Government with no real rate of interest—so the burden does not increase, however long the repayment period. The Government propose to write off any outstanding student loan amount after 25 years.

Mrs. Calton

To ask the Secretary of State for Education and Skills how many charges and of what value have been made in error to graduates whose income did not reach a level where repayment was required for failure to make repayments of student loans. [154001]

Alan Johnson

The information is not available in the form requested. Borrowers with the old, mortgage style, loans may be charged administration fees if they fall into default. This can happen if a borrower's income is below the deferment threshold but they neither apply to defer their loan repayments nor make loan repayments.

Different arrangements apply to the income-contingent loans, where repayment is triggered automatically by the Inland Revenue when the borrower's income exceeds the repayment threshold. Borrowers outside the UK who fail to repay these income-contingent loans to the Student Loans Company when they should, may incur financial penalties.

Where charges are made in error, the Student Loans Company will refund them.