§ Mr. HancockTo ask the Secretary of State for Education and Skills what the level of student debt was in each of the last three years for which figures are available; and what projections he has made for each year up to 2010. [126815]
§ Alan JohnsonBorrowers are liable to repay their loans from the April following graduation or otherwise leaving their course. Students who started their course from the 1998/99 academic year will repay income contingent loans. Loans for those who started their course before 1998/99 are repayable on a mortgage style basis. The table shows estimates of average student loan debt at the point at which they entered repayment status for borrowers who became liable to repay their loans in financial years 2000–01 to 2002–03.
New student support arrangements were introduced from academic year 1998/99. Most new students in that year (apart from specified exceptions) received support for maintenance expenditure through means-tested grants (about 25 per cent, of the support available) and non means-tested student loans (about 75 per cent, of the support). From 1999/2000, students who entered higher education after 1998/99 received support for maintenance expenditure through loans. About three quarters of the value of these loans is not subject to means-testing. The repayments on these loans are on an income contingent basis.
Students who started their course up to 1997/98, and those who entered in 1998/99 under the existing arrangements, are eligible for mortgage style loans; the ratio of support for these students is roughly 50 per cent, means-tested grant and 50 per cent, non means-tested loan.
The first cohort of students on a three-year degree course who entered higher education under the new student support arrangements became liable for repayment in April 2002. That, and earlier, cohorts includes a disproportionate number of students on shorter courses as well as those who have left higher education before completing their courses. Therefore the average level of debt will not be representative of the average debt experienced by those who complete their courses.
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Average student loan debt on entering repayment status1.2 Financial year entered repayment status3 Mortgage style loans4 (£) Income contingent loans5 (£) 2000–01 3,920 2,340 2001–02 4,500 3,530
Average student loan debt on entering repayment status1.2 Financial year entered repayment status3 Mortgage style loans4 (£) Income contingent loans5 (£) 2002–03 5,160 6,000 1 Data rounded to nearest 10. Includes Interest. 2 Excludes any repayments which may have been made before borrowers enter repayment status. 3 Borrowers enter repayment status in the April following their graduation or otherwise leaving their course. 4 Loans made to students who entered higher education up to 1997/98 or who entered in 1998/99 under existing arrangements. Includes loans repayable to the private sector following the sale of two portfolios of student loans. 5 Loans, repayable on anincome contingent basis, available to students who entered higher education from academic year 1998/99. These loans were subject to a repayment holiday until April 2000. Includes hardship loans and the fixed rate loans (£500) to eligible part-time students. Source:
Student Loans Company
Data on debts for which there is no public subsidy, such as overdrafts and credit cards, and informal debts to family and friends, are not held centrally.
Future student debt will depend on a range of factors, including the amount of loan students take out. After 2005/06, debt will be influenced by the borrowing behaviour of those students eligible for the HE grant. After 2006/07, student debt will also depend on the fee levels charged by universities to their full-time undergraduates, and the extent to which those students exercise the new option to defer those fees.