§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science (1) what is the projected amount to be repaid by a student taking out the maximum available loan(a) studying in London and (b) studying outside London to the Student Loans Company by a graduate who was living away from the parental home, does not defer repayments, and was on a (i) three-year and (ii) four-year course commencing October 1990;
(2) if he will give a breakdown of monthly repayments over the standard five-year repayment period to be repaid by a student taking out the maximum available loan (a) studying in London and (b) studying outside London to the Student Loans Company by a graduate who was living away from the parental home, does not defer repayments, and was on a (i) three-year and (ii) four-year course commencing October 1990.
§ Mr. Alan HowarthBorrowers repay in real terms the amount that they borrowed. The loan outstanding at the start of repayment depends on the maximum loan available in successive academic years; on the rates of indexation applicable during the period of the loan, and on when in each academic year the borrower draws down the loan. These factors also affect the size of the monthly repayments, as does the length of the standard repayment period.
The table shows, to the nearest pound, the expected loan outstanding at the start of repayment and the monthly cash instalments due in each case. The figures take account of the GDP deflator assumptions given by my right hon. Friend the Chancellor of the Exchequer in his autumn statement. They assume that the borrowers draw down the loan at the start of each academic year and that repayments will take place over five years, starting in April 1994 where the course has lasted three years and in April 1995 where it had lasted four years. The Government will review annually the length of the standard repayment period, in order to ensure that repayments are manageable.
Loan outstanding at start of repayment £ Monthly instalment£ (a) Borrower who had studied in London and lived away from home: (i) On a three-year course 1,967 36 (ii) On a four-year course 3,010 35 (a) Borrower who had studied outside London and lived away from home: (i) On a three-year course 1,741 32 (ii) On a four-year course 2,638 48
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science if he will provide a detailed breakdown of how his Department arrived at the student loans repayment figures given in table 3 of the leaflet "Loans for Students: A brief guide 1990–91" published in August 1990.
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§ Mr. Alan HowarthThe figures in table 3 are purely illustrative. They provide for borrowers to repay in real terms the amount that they borrow.
The table shows the expected monthly cash instalments due from a student who starts a course in the academic year 1990–91 and borrows the maximum loan facility each year at the "elsewhere" rate of loan. It assumes that the value of full year student support from grant and loan will increase by 6 per cent. in the academic year 1991–92, by 3.5 per cent. in the academic year 1992–93 and by 3 per cent. thereafter.
The loan outstanding at the start of repayment is the sum of the maximum loan facilities for the relevant years plus an amount resulting from the indexation of the amount outstanding each year. The indexation rates a re assumed to be 9.8 per cent. for the year beginning 1 September 1990, 4.75 per cent. for the year beginning 1 September 1991, 3.5 per cent. for the year beginning 1 September 1992 and 3 per cent. from 1 September 1993 onwards.
Regulation 7(2) of the Education (Student Loans) Regulations 1990 determines the number of monthly instalments. Regulation 7(1) determines the date when repayments start, which depends on the length of the borrower's course. Regulation 7(3) determines the amount of the monthly instalments.
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science if he will give the cost to the Exchequer of the error made by the Student Loans Company in its calculations in its leaflet "Student Loans: Are You in the Picture?" ref. PO5 143/90.
§ Mr. Alan HowarthI am informed by the Student Loans Company that the cost of producing a second edition of its brochure was £120,907, which was met from within the company's approved budget.
§ Mr. Andrew SmithTo ask the Secretary of State for Education and Science if he will give the amounts by which the loan facilities will be uprated for the academic year 1991–92 for students in(a) London and (b) outside London.
§ Mr. Alan HowarthMy right hon. and learned Friend expects to announce shortly the maximum loan facilities for the academic year 1991–92.