Date lodged: 3 January 2019
To ask the Scottish Government what estimates it has made of how many unpaid student loans there will be in the next (a) 5, (b) 10 and (c) 15 years, based on the (i) previous and (ii) latest Scottish student loan repayment thresholds, expressed in (A) cash and (B) percentage terms.
Answered by: Richard Lochhead 31 January 2019
The following table shows the cash value of student loans that are estimated to be unpaid and written-off in the next 5, 10 and 15 years for both the previous and latest student loan repayment thresholds.
(A) Cash value of unpaid student loans
Real terms (2018-19 prices)**
Cash value of total unpaid loans (£m)*
a) 5 years
b) 10 years
c) 15 years
Latest repayment threshold (i)
Previous repayment threshold (ii)
Note: 2018-19 is the base financial year. 5 years relates to financial year 2023-24, 10 years relates to 2028-29 and 15 years relates to 2033-34.
*The cash value of total unpaid loans is the total loan write-offs that have occurred up to that point.
**Real terms calculated by deflating cash values to 2018-19 prices by using the growth rate of the loans i.e. the interest rate = minimum of RPI or BoE base rate+1%.
(B) There is no meaningful total against which these cash values can be expressed in percentage terms. The outstanding loan balance increases with each year’s outlay and changes from year to year depending on repayments and write-offs which are already taken into account. Write-offs can be against loans taken at any point in the past and are not comparable with the loan balance in the same year.