§ Chris GraylingTo ask the Secretary of State for Education and Skills whether the Government's figures for the cost of student loan subsidies include an element for(a) administration and (b) bad debt. [152790]
§ Alan JohnsonThe Government's figures for the cost of student loan subsidies do include a provision for bad debt and for loans not recovered from borrowers meeting the criteria for cancellation of the outstanding debt. The costs for administering student loans is not included but are accounted for separately and, are recorded annually in the Departmental Report.
§ Mr. Frank FieldTo ask the Secretary of State for Education and Skills how many one-and two-parent households will be eligible for the maximum combined up-front university grant for academic year 2006/07. [154012]
§ Alan JohnsonWe expect around 30 per cent. of students will be eligible for a full combined grant of £2,700 in 2006/07, of which we expect around two thirds to be dependent students (who may be from one or two-parent households). Future numbers and proportions of students receiving grants will depend on changes in demand for higher education.
§ Mrs. CaltonTo ask the Secretary of State for Education and Skills how many former students have outstanding loan accounts; how many of these are being repaid; how many are not being repaid because of the low income of the borrower; and what factors, apart from income, are taken into account when repayment is demanded. [153825]
§ Alan JohnsonMost borrowers 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. There are differences in the repayment terms for the two types of loan.
Borrowers enter repayment status in the April following graduation or otherwise upon leaving their course. There were 1,492,000 student loan borrowers in the United Kingdom in repayment status at the end of the end of the financial year 2002–03. Of these, some 815,000 borrowers had mortgage-style accounts that were up to date with repayments, or income-contingent accounts which are repaid through the tax system.
210WSome 559,000 borrowers who had mortgage-style loan accounts which they were liable to repay had been granted deferment because their income was below the threshold (£21,022 per annum from 1 September 2002, £21,364 from 1 September 2003).
No repayments are collected from income-contingent borrowers whose income falls below £10,000 per annum. Repayments of income-contingent loans are collected through the tax system and are notified to the Student Loans Company after the end of the tax year for reconciliation with their records. Therefore the data on the number of borrowers with income-contingent loans, where repayments have not been deducted because the borrower's income is below the repayment threshold, are not yet available.
The income-contingent loan repayment system takes into account whether the borrower is in receipt of disability related benefits, and whether they are covered by the Repayment of Teacher Loans scheme. Loans are cancelled: when the borrower reaches 65 years of age; if the borrower is in receipt of a disability related benefit and is permanently unfit for work; or if the borrower dies.
The mortgage-style loan repayment system takes into account whether the borrower is in receipt of disability related benefits; whether they are covered by the Repayment of Teacher Loans scheme; and the number of loans taken out. Loans are cancelled: after 25 years or when the borrower reaches the age of 50 (60 if the borrower was aged over 40 when he/she last borrowed), whichever is the earlier; if the borrower is in receipt of a disability related benefit and is permanently unfit for work; or if the borrower dies.
§ Mr. ClappisonTo ask the Secretary of State for Education and Skills what estimate he has made of what the cost of providing maintenance loans to students from 2006/07 would be(a) under existing arrangements and (b) under the proposals in the Higher Education Bill. [154763]
§ Alan JohnsonThe Department's future spending plans on maintenance loans under existing arrangements and under the proposals in the Higher Education Bill will depend on the outcome of Spending Review 2004.
As stated in the Regulatory Impact Assessment published on 8 January, the resource cost1 of raising the maximum rate of maintenance loan to match the basic living costs expenditure of the mid-range student is estimated at £65 million in 2006/07 terms. This is the resource cost to the Government of both the additional amount of maintenance loan advanced and the resulting impact on the repayments of fee loans.
1Estimates of the resource cost of the loans represent the real economic cost to the Government of providing the loans and take into account the forecast loan repayments, the cost of charging an interest rate below the government's cost of funds and any loan write offs