§ Mr. Alan WilliamsTo ask the Secretary of State for Education and Skills what the threshold for commencement of repayment of a student loan(a) was at the time of introduction of student loans and (b) is now; and what the threshold would be now if it had risen in line with the retail price index. [143177]
§ Alan JohnsonThe threshold for repayment of a student loan was £10,000 on the introduction of the income contingent student loan scheme. The threshold is still £10,000. The first point at which borrowers could be required to repay income contingent loans was April 2000. The Retail Price Index figures used to maintain the value of student loans in real terms were 2.6 per cent., 2.3 per cent. and 1.3 per cent. for academic years 2000–01, 2001–02 and 2002–03 respectively. Had the threshold been raised in the same way it would now be £10,630.
§ Chris GraylingTo ask the Secretary of State for Education and Skills (1) what estimate he has made of the annual cost to the Government of the increase in the income threshold for student loan borrowers after 2005; [144570]
(2) what additional annual provision he plans to make to cover the cost of the income threshold for repaying income-contingent student loans after 2005. [144571]
§ Alan JohnsonWe plan to publish a Regulatory Impact Assessment early in the new year which will set out the impact of this change alongside the financial implications of the other policies announced in the Higher Education White Paper.
§ Mr. WillisTo ask the Secretary of State for Education and Skills what the interest rate on student loans has been in each year since they were introduced; for what reasons the rates have fluctuated; and if he will make a statement. [144624]
§ Alan JohnsonThe interest rate on student loans in each year since their introduction is set out in the following table:
970W
Interest rates applied to student loans—September 1990 to August 2004
Academic rear Percentage Academic year Percentage 1990/91 9.80 1997/98 2.60 1991/92 5.80 1998/99 3.50 1992/93 3.90 1999/2000 2.10 1993/94 1.20 2000/01 2.60
Interest rates applied to student loans—September 1990 to August 2004
1994/95 2.30 2001 2.30 1995/96 3.50 2002/03 1.30 1996/97 2.70 2003/04 3.10 Interest applied to student loans is set at the Retail Price Index (RPI) for the financial year ending in the previous March. As an annual measure of inflation, reflecting the change to prices of goods and services in the economy, this ensures that borrowers repay in real terms the value of the loan they take out.