Asked by: Lord Stevens of Birmingham (Crossbench - Life peer)
Question to the Department for Education:
To ask Her Majesty's Government, further to the speech by the Minister for Higher and Further Education on 24 February regarding their response to Dr Philip Augar's Review of Post-18 Education and Funding, published in May 2019, what proportion of their modelled overall reduction in future costs to taxpayers from student loans arises from (1) the new proposals themselves, (2) changes to the discount rate, or (3) other factors.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The fiscal impacts of the student loan reforms announced on Thursday 24 February 2022 are detailed in full in the equality impact analysis (EIA) published alongside the announcement, which is available here: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.
Updates to the Resource, Accounting, and Budgeting (RAB) charge, that result from the change to the discount rate, announced by the government on 13 December 2021, are provided in Annex B of the EIA linked to above. The proportion of loan outlay issued is not expected to be repaid in present terms. Forecasts of the savings that will result from the reforms, set out in Tables 11 and 12 of the EIA, use the updated RAB as a baseline, meaning the discount rate change does not account for any of these savings.
The forecast savings are wholly attributable to the two-year tuition fee freeze and changes to student loan repayment terms, as set out on page 13 of the higher education policy statement & reform consultation, and do not incorporate other elements of the reform package. The consultation is attached.
The savings do include the changes to the Plan 2 repayment threshold for 2022/23 financial year, announced on 28 January 2022, prior to the announcement of the whole reform package.