HC Deb 08 December 2003 vol 415 cc298-9W
Dr. Cable

To ask the Secretary of State for Education and Skills what the reasons are for the increase in interest rates on student loans from 1.3 per cent, to 3.1 per cent.; and what the criteria are for calculating the interest rates applied to student loans. [142291]

Alan Johnson

Student loans are not commercial loans. The Government subsidises the actual cost of interest on the loans. However, to make sure that all borrowers pay back the same amount that they sorrowed in real terms, the Government uprate the value of what is owed in line with the general rate of inflation. This is done by using the Retail Prices Index RPI) and fixing the interest charged to that rate. The interest rate on student loans is set every year from I September and is based on the RPI for the financial year ending the previous March. For last year this was 1.3 per cent, and for this year it is 3.1 per cent.

Mr. Cousins

To ask the Secretary of State for Education and Skills if he will estimate the period required for full recovery of his proposed top-up fees, given a starting salary threshold for repayment of(a) £15,000, (b) £18,000 and (c) £20,000 per year. [142430]

Alan Johnson

The level of loan a student accrues as an undergraduate will depend on the level of fee charged by the university they choose to attend, how much loan they take out to cover that fee, and how much maintenance loan they take out. The time taken to repay that loan will depend not only on the threshold above which repayment commences, but also on the graduate's salary in the years following graduation, and whether they experience any periods during which their earnings drop below the threshold, for example because of career breaks.

Chris Grayling

To ask the Secretary of State for Education and Skills what he estimates the annual cost will be of means-testing students from mainland Europe for liability to pay university tuition fees. [142009]

Alan Johnson

The public contribution to fees for European Union students in 2001–02 was £17 million. This can be expected to rise slightly with the enlargement of the EU.

Mr. Willis

To ask the Secretary of State for Education and Skills whether student teachers on postgraduate teacher training courses will continue to be exempt from tuition fees at all universities and colleges following the introduction of top-up fees; and if he will make a statement. [142649]

Alan Johnson

I refer the hon. Member to the answer that I gave to my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) on 20 November 2003,Official Report, columns 1497–498W.