The student loan scheme, costs and terms of references
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WRITTEN QUESTION TO THE MINISTER FOR EDUCATION, SPORT AND LEISURE BY DEPUTY G.C.L. BAUDAINS OF ST. CLEMENT
ANSWER TO BE TABLED ON TUESDAY 3rd JULY 2007 Question
Would the Minister, in relation to the student loan scheme, advise members –
( a ) w h e ther there will be an maximum loan amount for the overall period of study, including interest,
given that there is a £1,500 maximum per annum?
( b ) w h e ther the terms of the agreement reached with the Banks by the Minister includes reference to
interest charged and, if so, whether that includes a fixed or variable rate? Furthermore will the Minister be underwriting loans above a set limit?
( c ) w h e ther loans will be fixed term, or able to be paid back with corresponding reduction in interest? ( d ) how the scheme caters for students who may be declined a loan by banks for whatever reason? Answer
With regard to the student loan scheme –
( a ) there is no maximum loan amount for the overall period of study;
( b ) the agreement reached with the banks provides for a loan with interest charged at 1% above base. The
1% is a fixed rate, base rate however can change. The Minister will not be underwriting loans above a set limit;
( c ) the repayment period is a fixed term of 5 years commencing one year after graduation. There are
provisions however for early repayment which would have the effect of reducing accumulated interest;
( d ) the arrangements made with the banks provide for a loan supported by a States guarantee; the banks
therefore will not refuse loans to eligible students;