To ask Her Majesty's Government what assessment they have made of the impact of proposed changes to student loan repayments on sectors of the economy experiencing staffing shortages, such as (1) nursing, and (2) teaching.
30 March 2022
It is important that we have a sustainable student finance system that is fair to graduates and taxpayers.
For new students entering higher education from September 2023 onwards, the government is reducing the interest rates charged on student loans to RPI+0%. This means that no one who takes out a loan under these new terms will repay more than they originally borrowed when adjusted for inflation. These new loans will have a repayment threshold of £25,000 per year (increasing with inflation from April 2027) and a term of 40 years. For existing borrowers and students who start in the 2022/23 academic year, the government will be maintaining the repayment threshold at its current level of £27,295 per year up to and including the 2024/25 financial year, and increasing it annually in line with inflation thereafter.
Borrowers on both the new and the existing loan terms will continue to benefit from the unique protections that student loans offer. Individuals earning under the relevant repayment threshold will not be required to make any repayments at all, and any outstanding loan debt will be written off at the end of the loan term at no personal detriment. No commercial loans protect borrowers in these ways.
A full impact assessment of the department’s student finance reforms is available here: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment. Department analysis found that the system will remain progressive overall.
The government will continue to support recruitment into certain priority sectors through targeted incentives. In nursing, midwifery and allied health subjects, new and continuing students on pre-registration courses at English universities have, from September 2020, benefitted from at least £5,000 per academic year of additional maintenance grant funding which they will not need to pay back. There is also up to £3,000 of further funding available for students with child dependants or students studying specialist disciplines that struggle to recruit. These grants come as part of the government’s manifesto commitment to increase nurse numbers by 50,000 by 2025.
In teaching, the government has put in place a range of measures, including bursaries worth up to £24,000 and scholarships worth up to £26,000, to encourage talented trainee teachers to key subjects such as chemistry, computing, mathematics and physics.