Question reference: S5W-31396
- Asked by: Ross Greer, MSP for West Scotland, Scottish Green Party
- Date lodged: 24 August 2020
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Current status: Answered by Richard Lochhead on 3 September 2020
Question
To ask the Scottish Government for what reason interest continues to accrue on student loans when an individual is on maternity leave.
Answer
The accrual of interest on student loans is provided for in The Education (Student Loans) (Repayment) Regulations 2009, a UK Statutory Instrument that impacts on all UK borrowers.
There are currently no circumstances whereby interest would stop accruing (unless repaid in full, or written off). As a result, where a borrower is on maternity/paternity leave there is no provision in these UK Regulations to prevent or pause the accruing of interest in these circumstances.
However, the interest rate on student loans that impacts Scottish students is based on the lower of either the Bank of England base rate +1% or the Retail Price Index (RPI). The current interest rate for Scottish borrowers is 1.1%. This compares to other borrowers in the rest of the UK who are repaying on different plan types where the interest rate is 5.4%.