Government Response

The Government responded to this petition on Monday 7th March 2016

There is a legal obligation on all borrowers to make repayments if income is above the repayment threshold. We will continue to take action where it is clear people are seeking to avoid repayment.

New students starting from autumn 2016 are eligible to apply for increased loans for living costs, instead of maintenance grants. Students continuing their courses who were already in receipt of a maintenance grant will continue to receive one.

New students will have more money under the new student support living costs arrangements when they embark on their degree, as the Government has increased the loan for living costs to the highest level on record for eligible students from low income backgrounds.

The Government is committed to maintaining the UK’s world class Higher Education (HE) system. As we enable more students than ever before to study, we must also ensure that the system remains financially sustainable. It remains a fundamental principle that a borrower’s contribution to the cost of their education should be linked to their ability to repay, maintaining a fair balance between taxpayers and graduates in the costs of HE.

Borrowers will begin to repay their loans once they earn over the repayment threshold of £21,000 from April 2016. Deductions are taken at 9% of any income over that threshold and any outstanding balance will be written off after 30 years. The student loan repayment system protects lower earning borrowers, while those who earn more will pay back more quickly.

There is a legal obligation on all borrowers to remain in contact with SLC, providing updates on their location, circumstances and income, and to make repayments if their income is above the repayment threshold. There are currently no plans to make it a criminal offence not to repay a student loan, but the Government will take stronger action under civil law to trace borrowers and to recover loans where it is clear that those borrowers are seeking to avoid repayment. This is fair to those borrowers who meet their repayment obligations, and to taxpayers who underwrite the student loans system.

A guiding principle in the Government’s approach to managing public money is Zero Tolerance for fraud. Prosecution will be considered in cases of fraudulent evasion of repayment.

Department for Business, Innovation and Skills