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<p>As education is a devolved issue, the following answer concerns the student finance system in England only. The student finance systems of the devolved administrations differ from that of England.</p><p> </p><p>The department makes regular assessments of the expected write-off amount of student loans issued in each financial year. These forecasts are published on GOV.UK.</p><p> </p><p>The headline statistic Resource Accounting and Budgeting (RAB) charge is the percentage of the loans (both tuition and maintenance) outlaid to students in a given financial year, that the government expects to subsidise, i.e. write-off.</p><p> </p><p>Repayments are calculated based on income, not on the amount borrowed. Borrowers earning less than the repayment threshold repay nothing at all, and loans are cancelled at the end of the loan term with no detriment to the borrower. The Student Loans Company will also cancel a borrower’s liability to repay a loan if the borrower dies or receives an eligible disability-related benefit and because of the disability is permanently unfit for work. It is not possible to disaggregate the pure impact of salary levels of borrowers (graduates and non-graduates) on loan write-offs.</p><p> </p><p>The latest publication of the student loan forecasts for England was published in June 2023, and will be updated at the end of June 2024. The RAB charge for full-time undergraduate higher education (plan 2) loans issued in the 2022/23 financial year was forecast to be 28%.</p><p> </p><p>Student loan repayments volumes are sensitive to the wider economic environment. Earnings of borrowers (both graduates and non-graduates), interest rates, inflation rates, repayment threshold freezes, policy changes and modelling improvements, all influence the RAB charge forecasts. For these reasons RAB forecasts from the past are not directly comparable year-on-year.</p> |