Question to the Department for Education:

To ask Her Majesty's Government what calculation they use to decide the level of write off of student loan debt.

The government publishes its loan write-off rules, available here: https://www.gov.uk/repaying-your-student-loan/when-your-student-loan-gets-written-off-or-cancelled. We estimate the proportion of loan outlay issued in each financial year that we do not expect to be repaid through a metric called the Resource And Budgeting (RAB) charge.

The RAB charge is calculated by taking repayment forecasts for income contingent repayment loans and discounting them back to the period that the loan is issued using the discount rate provided by HM Treasury (currently RPI+0.7%). This gives us a net present value (NPV) of the future repayments and the charge is the relative difference between the loan issued and the NPV of the repayments. Further details of the RAB charge calculation are provided in the annual student loan forecast publication methodology document, available here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/920992/Student_loan_forecasts_201920.pdf.

The RAB charge estimate is determined by earnings and repayment projections over the next 30-40 years, and therefore is inherently uncertain. Forecasts for the RAB charge are published each year, and are available here: https://explore-education-statistics.service.gov.uk/find-statistics/student-loan-forecasts-for-england/2019-20.