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26 Jan 2009 : Column 264W—continued

We are maintaining very good completion rates for first degrees with the latest statistics from the Organisation for Economic Co-operation and Development showing that the UK ranks 3rd of the 27 countries reporting data in this area. This has been achieved and maintained during a period when higher education has been opened up to both increased numbers and a greater diversity of students.

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Students: Disadvantaged

Michael Gove: To ask the Secretary of State for Innovation, Universities and Skills how many and what percentage of pupils eligible for free school meals progressed to higher education in the last year for which data are available. [251296]

Mr. Lammy: Currently only one data point is available (for 19-year-olds in 2005/06) and this shows that, at a national level, 13.6 per cent. of young people who were in receipt of free school meals (FSM) at age 15 in 2001/02 had progressed to HE by age 19 by 2005/06. The equivalent figure for non-FSM pupils was 33.0 per cent., leaving a gap of 19.4 percentage points between the two groups.

Percentage of children aged 15 in maintained schools in England by FSM status in 2001/02, who attended an HEI in the UK (or studied HE in an FEI college in England) by the age of 19 in 2005/06

Population Number of children progressing to HE Percentage

Children in receipt of FSM




Children not in receipt of FSM




All children




Gap in participation by FSM status


Due to rounding (to the nearest 100 children), components may not sum to totals.
Matched Higher Education and Statistics Agency (HESA), National Pupil Database (NPD) and Individual Learner Record

Work is currently in progress to obtain matched data that will allow DIUS analysts to extend the progression rate analysis to higher education entry by age 20 and this will be available in the next few months.

Students: Fees and Charges

Mr. Boswell: To ask the Secretary of State for Innovation, Universities and Skills what steps he has taken to establish a mechanism for annual review of the new funding regime for equivalent or lower qualifications. [250711]

Mr. Lammy: The Secretary of State established when he finalised this policy in January 2008 that the Higher Education Funding Council for England (HEFCE) should conduct an annual review on its impact. I wrote to HEFCE earlier this month setting out the terms of reference for the review. A copy of this letter has been placed in the House of Commons Library. HEFCE has started work on the review and plan to report later in the year.

Letter from David Lammy to Tim Melville-Ross (HEFCE), dated 7 January 2009:

Students: Finance

Mr. Rob Wilson: To ask the Secretary of State for Innovation, Universities and Skills what the cost of writing off unpaid student loans has been in each year since such loans were introduced. [248912]

Mr. Lammy: The information is as follows:

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Amount of public loan debt written off by financial year (UK and EU domiciled students)
Financial year Loan write off amount (£ million)





























There are two types of student loan—those taken out before 1 September 1998 (‘mortgage style loans’) and those taken out after 1 September 1998 (income contingent repayment loans).

Excluding those in arrears, loans are written off when, in the case of those who entered higher education before 1 September 2006, the borrower reaches the age of 65; or, in the case of those who entered higher education from 1 September 2006, 25 years after their statutory repayment due date.

Loans are also written off if a borrower dies, or receives a disability benefit and because of the disability is permanently unfit for work.

The significant rise on write offs for the financial year 2007-08 is due to £3.2 million of backdated write offs for individual voluntary arrangements (IVAs) and bankruptcy, which the Student Loans Company did not have the functionality to process until that year. Since the Higher Education Act 2004 came into force, borrowers declaring themselves bankrupt have still been liable for their student loan debt.

The steady rise in the amount of public loan debt written off each year also reflects the growing maturity of the student loan book. In other words, there has been a year-on-year increase in the total number of loans which have been issued since the schemes began.

Mr. Philip Hammond: To ask the Secretary of State for Innovation, Universities and Skills what his latest estimate is of the amount overpaid in student loan repayments in the last 12 month period for which data are available. [248553]

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Mr. Lammy: The data are not available in the form requested.

On 31 March 2008, the loan accounts of 30,091 borrowers were in credit by over £5.00, at an average of £210 per borrower. These amounts are refunded with interest by the Student Loans Company when borrowers’ accounts are reconciled at the end of the financial year.

Mr. Swayne: To ask the Secretary of State for Innovation, Universities and Skills what recent representations he has received on the difference between market interest rates and the interest rate charged on student loans; and if he will make a statement. [250203]

Mr. Lammy [holding answer 22 January 2009]: In the last three months, Members have tabled five questions on this subject. The Department has also received representations from members of the public and the press.

The legislative provisions for income contingent repayment student loans require that the rate of interest must: (i) be no higher than is necessary to maintain the value of the loan in real terms; and (ii) not exceed 1 per cent. above the highest of the base rates of a specified group of banks(1) (the ‘low interest cap’).

The interest rate is normally set every September to equal the retail prices index for the previous March—currently 3.8 per cent. Following the reduction in the Bank of England base rate by the Monetary Policy Committee on 4 December 2008, all the specified banks reduced their base rates to 2 per cent. and the low interest cap came into play. The Student Loans Company (SLC) therefore reduced the interest rate for income contingent loans from 3.8 per cent. to 3 per cent. with effect from 5 December 2008.

Following the latest reduction in the Bank of England base rate on 8 January 2009, all the specified banks have now reduced their base rates to 1.5 per cent. The SLC therefore reduced the interest rate for income contingent loans from 3 per cent. to 2.5 per cent. with effect from 9 January 2009.

The SLC published this information on their website and in national newspapers.

The interest rate for loans taken out before 1998 (known as ‘mortgage style loans’) is not affected as these loans are governed by different legislation.

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