Question to the Department for Education:

To ask the Secretary of State for Education, pursuant to the Written Statement on student finance of 9 October 2017, HCWS145, what estimate she has made of the effect on non-repayment of graduate loans of the changes to the repayment thresholds in each of the financial years (a) 2017-18, (b) 2018-19 and (c) 2019-20.

The long-term cost of the student loan system is reflected in the Resource Accounting and Budgeting (RAB) charge. This measures the proportion of loan outlay that we expect not to be repaid within its thirty-year term (when future repayments are valued in present terms).

The RAB charge associated with higher education loans issued in each of the financial years (a) 2017-18, (b) 2018-19 and (c) 2019-20, is expected to change from around 30% under the previous policy to between 40% and 45% under the new policy.

This long-term cost of the system is a conscious investment in young people. It is the policy subsidy required to make higher education widely available and so achieve the Government’s objectives of increasing the skills in the economy and ensuring access to university for all with the potential to benefit.