Question to the Department for Education:

To ask the Secretary of State for Education, what discussions she has had with the Student Loan Company on the calculation formula used to determine overseas earnings thresholds for student loan repayments for English and Welsh students who live in the US or work for a US employer.

The repayment of student loans is governed by the Education (Student Loans) (Repayment) Regulations 2009 (as amended). The regulations set out the calculation formula to determine overseas repayment thresholds for student loan repayments. A change in the calculation formula would require a legislative amendment.

Ahead of each financial year, in line with the regulations, the department calculates the updated repayment thresholds to apply for English borrowers residing outside of the UK, including those resident in the USA, and provides these to the Student Loan Company (SLC), who administer the loan accounts.

Student loan repayments are income contingent. To take account of differences in living costs in different countries, overseas repayment thresholds are determined by each country’s price level index (PLI) data, as published by the World Bank and updated annually. PLI data provides a measure of the differences in the general price levels of countries and, therefore, represents a relative cost of living between countries, enabling a fair threshold to be set.

Based on PLI data, countries are placed into different “bands” reflecting their cost of living relative to other countries and to the UK. As the relative cost of living in different countries varies over time, individual countries may move between bands following an annual threshold update. Where PLI data for a country is not available, the department may determine the applicable PLI value for that country by reference to a comparable country.