Question to the Department for Education:

To ask the Secretary of State for Education, what assessment her Department has made of the potential impact of the repayment term for post-2012 student loans being set at 40 years on (a) graduates in lower-paid or insecure employment, (b) social mobility and (c) students from lower-income backgrounds.

The repayment term for Plan 2 loans is 30 years. They were designed and implemented by previous governments. Students in England starting degrees under this government have different arrangements.

The student loan system is designed to protect borrowers, and repayments are determined by income, not the amount borrowed or the rate of interest. Borrowers only start repaying their student loan once earnings exceed the threshold, after which they pay 9% of income above that level. To protect lower earners, if a borrower’s earnings drop, so do their repayments, and if earnings fall below the repayment threshold, then they repay nothing at all.

After 30 years any outstanding loan and interest is cancelled at the end of the loan term, and debt is never passed on to family members or descendants. A borrower on Plan 2 entering repayment at age 21 would have any outstanding loan amount written off at age 51. No commercial loan offers this level of protection.