Asked by: Baroness Taylor of Bolton (Labour - Life peer)
Question to the Department for Education:
To ask His Majesty's Government when they expect to publish an update to the calculation of the resource accounting and budgeting charge for student finance; and whether they propose to make any changes to the basis for calculation used at the time it was last updated.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
In the 2022/23 financial year, the Resource Accounting and Budgeting (RAB) charge was £5.5 billion, or 27% of the £20.0 billion of loans issued that financial year. The RAB charge for 2023/24 will be published in the department’s 2023/24 Annual Report and Accounts this summer.
Of student loans issued in the 2023/24 financial year, the government is expected to subsidise:
These forecasts are subject to change. The final RAB forecasts for 2023/24 will be available as part of the annual student finance statistical publication, released in June 2024.
The RAB charge, the government subsidy anticipated on student loans issued in any particular financial year, is calculated as the present value of student loan outlay less expected future repayments, in accordance with relevant International Financial Reporting Standards and guidance from HMT’s Government Financial Reporting Manual (FReM).
The FReM requires future repayments of student loans to be discounted at the higher of the intrinsic rate and HMT’s discount rate, based on analysis of real yields on UK index linked Gilts and are specifically appropriate to central government.
The FReM is kept under constant review. It is updated to reflect developments in relevant standards and best practice.
Asked by: Baroness Taylor of Bolton (Labour - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what is the current value of the resource accounting and budgeting charge for student finance.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
In the 2022/23 financial year, the Resource Accounting and Budgeting (RAB) charge was £5.5 billion, or 27% of the £20.0 billion of loans issued that financial year. The RAB charge for 2023/24 will be published in the department’s 2023/24 Annual Report and Accounts this summer.
Of student loans issued in the 2023/24 financial year, the government is expected to subsidise:
These forecasts are subject to change. The final RAB forecasts for 2023/24 will be available as part of the annual student finance statistical publication, released in June 2024.
The RAB charge, the government subsidy anticipated on student loans issued in any particular financial year, is calculated as the present value of student loan outlay less expected future repayments, in accordance with relevant International Financial Reporting Standards and guidance from HMT’s Government Financial Reporting Manual (FReM).
The FReM requires future repayments of student loans to be discounted at the higher of the intrinsic rate and HMT’s discount rate, based on analysis of real yields on UK index linked Gilts and are specifically appropriate to central government.
The FReM is kept under constant review. It is updated to reflect developments in relevant standards and best practice.