Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the effect of changes to Government policy on the repayment thresholds for graduate debt on the total resource departmental expenditure limit of her Department in each of the next three fiscal years.

The long-term cost of the student loan system is reflected in the Resource Accounting and Budgeting (RAB) charge, which measures the proportion of loan outlay that we expect not to be repaid when future repayments are valued in present terms. In each of the financial years (a) 2017-18, (b) 2018-19 and (c) 2019-20, the RAB charge for higher education loans is expected to change from around 30% under the previous policy to between 40% and 45% under the new policy. For Advanced Learner Loans, the RAB charge is expected to change from around 40% to between 50% and 55%.

The allocated budget for RAB expenditure forms part of the total resource departmental expenditure limit. It is disclosed within the depreciation figure set out within the annual report and accounts. In 2016-17 annual report and accounts, this was £3.5bn for 2017-18, £3.9bn for 2018-19 and £4.3bn in 2019-20. As in prior years, the 2017-18 budget will be reviewed as part of the Supplementary Estimates process.

The cost of the system is a conscious investment in young people. It is the policy subsidy required to make higher and further education widely available, achieving the Government’s objectives of increasing the skills in the economy and ensuring access to university for all with the potential to benefit.