Asked by: Lord Morris of Aberavon (Labour - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government what the Student Loans Company pays for capital to lend to students; and how any profits it makes are used.
Answered by Viscount Younger of Leckie - Parliamentary Under-Secretary (Department for Work and Pensions)
The Student Loans Company (SLC) administers student loans on behalf of the UK government and devolved administrations with funding from Her Majesty’s Treasury. While the SLC itself pays nothing on this funding, the cost to the government of this capital is the same as that paid on its general borrowing.
The amounts paid out and the interest charged can be found in the published document titled ‘DfE consolidated annual report and accounts 2016-17’ on pages 152 to 158, attached.
The government does not make a profit on these loans, which is reflected through the impairment charge in note 14.3.3 on page 155 of the attachment. This shows the proportion of the loan outlay and interest that the department expects not to recover. Student loans are subsidised by the government as a deliberate investment in the skills base of the country, which delivers benefits for individual students and for society at large.