To ask Her Majesty's Government what estimate they have made of the annual cost of removing interest payments from the student loans of health and social care workers.
Answered on
22 March 2021
The student loans system is designed to protect borrowers, including those who are employed in health and social care. Repayments are made based on a borrower’s monthly or weekly income, not the interest rate or amount borrowed, and no repayments are made for earnings below the repayment thresholds. Any outstanding debt, including interest accrued, is written off at the end of the loan term with no detriment to the borrower.
The people who would benefit most from an interest rate reduction are those high-earning borrowers who pay back all, or very nearly all, their student loans. The vast majority of those people who do not fully pay back their loans would not benefit because this part of their borrowing is written off. The government has not produced costings for the specific proposal to reduce student loan interest rates for health and social care workers.
In total, the government subsidises around 50% of the overall cost of higher education, making a conscious investment in the skills and people of this country. From September 2020, all eligible new and continuing nursing, midwifery and many allied health students on pre-registration courses at English universities are able to receive at least £5,000 per academic year of additional maintenance grant funding that they will not need to pay back.