Question to the Department for Education:

To ask the Secretary of State for Education, what assessment he has made of the ability of graduates to meet the new payment of student loans regime in the context of the rise in the cost of living.

The student finance and funding system must provide value for money for all of society at a time of rising costs.

While our reforms will ask graduates to repay for longer, they will also increase certainty for borrowers by reducing interest rates to match inflation only. This means that, under these terms, borrowers will not have to repay more than they have borrowed, when adjusted for inflation.

The student finance system will continue to protect lower earners and borrowers who experience a reduction in their income. If a borrower’s income is below the new repayment threshold of £25,000 per year, or the weekly or monthly equivalent, they will not be required to make any repayments at all. Any outstanding debt, including interest accrued, will also be written off at the end of the loan term at no detriment to individual borrowers. No commercial loans offer this level of borrower protection.

The new loan terms will be introduced for entrants to higher education starting on 1 September 2023 onwards. Students studying three-year degrees commencing in autumn 2023 will be required to make repayments only from April 2027, and only then when they are earning over the repayment threshold.

This student finance package is fair and sustainable for both students and the taxpayer, and our reforms ensure that higher education in England remains open to those with the ability and the ambition to benefit from it. We will continue to keep the terms of the system under review to ensure this remains the case.