HC Deb 22 January 2004 vol 416 cc1405-7W
Mr. Bendel

To ask the Secretary of State for Education and Skills on what amount of debt he has based his estimate of the length of time it will take the average graduate to complete graduate repayments after 2010; and what the change would be in this time if the annual income threshold for repayment was raised to(a) £18,000 and (b) £20,000. [147769]

Alan Johnson

[holding answer 19 January 2004]The estimate of the length of time to repay is the average across all students who take out a loan. This is different from the length of time it will take for some notional average graduate to repay. The estimate is from a model which simulates student loan repayments, based on assumed distributions of: length of time in Higher Education; size of means-tested loan taken out; size of fee loan, net of any fee remission; and borrower lifetime earnings. Some borrowers will repay more quickly than this estimated average and some less so.

As part of a package of reforms announced with the introduction of the Higher Education Bill, any debt outstanding after 25 years would be written-off. The threshold would increase to £15,000 in April 2005 and be increased with inflation from April 2010 onwards. The average time to repay would be around 13 years. Under the same approach to uprating the threshold, the average time to repay would be around 15 years with an £18,000 threshold and around 16 years with a £20,000 threshold.

Mr. Rendel

To ask the Secretary of State for Education and Skills if he will estimate the additional cost to the Student Loans Company of administering student loans if top-up fees are introduced; and if he will make a statement. [148265]

Alan Johnson

The introduction of deferred fee loans will have a small effect on the Inland Revenue and the Student Loans Company. Any extra costs will be largely a function of the numbers of graduates repaying loans after 2010. There is also the need to monitor what fees a student is incurring for what courses. There will be one-off development costs to the SLC of introducing the change. DfES would meet the cost. No figures are yet available. Information on the proposals is set out in the Regulatory Impact Assessment (RIA), copies of which are in the House Libraries.