Question to the Department for Education:

To ask the Secretary of State for Education, what estimate her Department has made of outstanding Plan 2 student loan debt in the year the first loans become eligible to be written off; and what assessment she has made of the potential impact of that debt on Government finances.

The oldest Plan 2 loans will become eligible for cancellation in 2046. For the England-domiciled 2012/13 cohort, the first to receive Plan 2 loans, we forecast a total of £17,036 million in loan balances (including interest) will be cancelled at the end of their 30-year repayment periods.

These cancellations are accounted for at the point of loan outlay. The future cancelled debt is reflected in both the national accounts and the department’s accounts in the year the loan is issued and is then updated annually. It will not result in further losses when the loans reach the end of their 30-year write-off period.

The treatment of student loans in the national accounts is in line the methodology published by the Office for National Statistics and can be found here: https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/methodologies/studentloansinthepublicsectorfinancesamethodologicalguide.