§ Dr. HarrisTo ask the Secretary of State for Education and Employment what the average level of debt per student was in the different cohorts leaving higher education each year over the last five years; what proportion of it is owed to(a) the state and (b) the private sector; and on what terms debts to the state are owed. [133116]
§ Mr. WicksInformation on student loan accounts is held by the Student Loans Company, and relates to debt owed to the state or to the private sector following the two Government debt sales. Published figures relate to the average value of student loan accounts for borrowers entering repayment at the start of the financial year: £1,660 in 1996–97; £2,180 in 1997–98; and £2,680 in 1998–99.
Information on private sector debt such as overdrafts and other commercial loans is not available centrally.
Figures for all three years relate to mortgage style loans which are repaid in accordance with the terms of a credit agreement signed by the borrower and attract an interest rate equivalent to the annual RPI. This typically means that these loans are repayable over a period of five years in equal annual instalments if the borrower's income is above 85 per cent. of national average earnings. Students entering higher education from 1998–99 are instead offered income contingent loans. Like mortgage style loans these are offered at a zero per cent. real terms interest rate but are repaid in accordance with Regulations in force at the time. The current Regulations require 865W borrowers to repay 9 per cent. of their gross income over £10,000 a year. This means that repayment of these loans will rise or fall in line with income and there is no fixed term for repayment.