§ Mr. WillisTo ask the Secretary of State for Education and Employment, pursuant to his answer to the hon. Member for Truro and St. Austell (Mr. Taylor) of 9 February 2001,Official Report, column 764W, on student loans, if he will estimate the nominal rate of 562W interest required to hold the net present value of student loans at £590 million, if the threshold of student loans repayment were increased to £13,000. [159543]
§ Mr. WicksThe 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 maintain this net present value with a threshold for repayment of £13,000 per year is estimated to be around 3½ per cent. It should be noted that such calculations should be treated with caution, due to their dependence on the estimates of the resource cost of income-contingent loans. Any interest rate calculated will consequently be subject to some fluctuation.