Commons Sense

House of Commons · Ministers' Questions

Student Loan Interest Payments

Monday 23 May 2022 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 2 Not answered 0

Key points

  • Student loan monthly repayments are based on income, not interest rates.
  • No one will see an increase in their monthly student loan repayment due to higher interest rates.
  • The government is actively looking at how to mitigate concerns about rising student loan interest rates.

Questions & Answers

Q1 Simon Baynes
Context

The question arises from concerns about the impact of rising interest rates on student loans.

Question

What steps his Department is taking to limit student loan interest payments. No one's monthly repayment will increase due to higher interest rates, which is an important point to make when people's budgets are tight.

Answer from Nadhim Zahawi

Monthly student loan repayments are based on income, not interest rates, meaning that no one will see their monthly repayment increase due to interest rates. From September, we have reformed the student loan system so that new borrowers will not repay more in real terms than they originally borrowed—that is fair.

Partly answered

Not addressed: While addressing the current repayment structure, the answer does not provide specific steps or commitments to limit rising interest rates.

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Q2 Simon Baynes
Context

The level of student loan interest rates is of great importance to students and their parents, particularly in the new city of Wrexham.

Question

Will my right hon. Friend provide further detail on how we can apply a sustainable downward pressure to student loan interest rates in future? The level of student loan interest rates is of great importance to students and their parents in my constituency.

Answer from Nadhim Zahawi

That is an important question, and I fully recognise the concerns of students and their parents about increasing interest rates. I am looking actively at how we can mitigate that, and we will be setting it out shortly. No one's monthly repayment will increase due to higher interest rates.

Partly answered

Not addressed: The answer acknowledges concerns but does not provide specific measures or commitments for reducing future student loan interest rates sustainably.

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