Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the potential impact of Plan 2 student loan interest rates on borrowers, particularly in relation to (a) long-term debt balances and (b) the ability of borrowers to (i) access mortgages and (ii) manage the cost of living.

The size of outstanding student loans does not prevent access to a mortgage, and student loan balances do not appear on borrower credit records, therefore the total size of a student’s debt is not considered in a mortgage application.

Monthly student loan repayments are considered alongside other living costs as part of the affordability check for mortgage applications along with other fixed monthly outgoings, but monthly repayments are not linked to the size of the outstanding loan.

Student loan repayments are income linked, not to the amount borrowed or interest applied, and are fixed at 9% above the earnings threshold. Borrowers earning below the earnings threshold are exempt from repayments. Outstanding loans, including accrued interest, are cancelled at the end of the loan term with no detriment to the borrower, and debt is never passed on to family members or descendants.