The Education (Student Loans) (Repayment) (Amendment) (No. 2) Regulations (Northern Ireland) 2006

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations, which come into operation on 1^st September 2006, amend the Education (Student Loans) (Repayment) Regulations (Northern Ireland) 2000 (S.R. 2000 No. 121) (“the principal Regulations”).

Regulation 3 inserts some new definitions into regulation 9 of the principal Regulations.

Regulation 4 substitutes regulation 12 of the principal Regulations. The Department writes off a borrower’s liability to repay his student loan in certain circumstances. The loan is written off if the borrower dies, if the borrower reaches the age of 65, or if the borrower receives a disability related benefit and as a result of the disability is permanently unfit to work. From September 2006 certain categories of borrowers will have their student loans written off 25 years after they became liable to repay. The remaining borrowers will have their loans written off when they reach the age of 65.

Regulation 5 inserts a new paragraph (3A) into regulation 13C of the principal Regulations. Regulation 13C provides that the Department may impose penalties on borrowers who fail to comply with requests for information. If the borrower fails to provide information, he may be charged a penalty of £50. Regulation 5 inserts a provision to the effect that the Department may impose a further charge of £100 where a borrower has paid a penalty but continues to refuse to provide the information. Regulation 6 makes a consequential amendment to regulation 13E of the principal Regulations.

Regulation 7 amends the principal Regulations so that where a borrower fails to provide information or to comply with a Penalty Notice, the Department may require him to repay his loan in full immediately.

Regulation 8 substitutes Part 5 to the principal Regulations. This Part has now been amended to include repayment of student loans by borrowers who move overseas following their courses of higher education. Borrowers are under a duty to notify the Department when they move overseas for a period of more than three months. They must also provide information as to their income (regulation 54 of the principal Regulations).

When a borrower moves overseas, the Department may serve a notice upon him requiring him to repay his loan in accordance with the principal Regulations. In such a notice, the Department may require the borrower who has failed to provide him with information required under regulation 54 of the principal Regulations to make a repayment to reduce the amount outstanding on his loan to that which would have been outstanding had the borrower provided the information.

Borrowers will be required to repay their loans by a fixed instalment under regulation 56 of the principal Regulations, unless regulation 57 applies. They will have to repay a fixed instalment each month, which will be calculated in accordance with regulation 58.

Under regulation 57 of the principal Regulations a borrower who has complied with a request for information may repay his loan for a period of 12 months by 12 income-related instalments. The instalment is one twelfth of 9% of the borrower’s gross income, disregarding income up to an applicable threshold, and any income in respect of which the borrower will be making loan repayments through the UK tax system. At the end of the 12 month period, the borrower’s repayments can be re-assessed, or he can repay in accordance with regulations 56 and 57. The borrower may also seek a re-determination of his income-related instalments during the 12 month period.

Regulation 58 sets out how the applicable threshold and fixed instalments are calculated. These will be calculated by reference to the price level index of a borrower’s country of residence. The price level index for that country will be calculated using the most recent provisional comparative price level indices measured in gross domestic product produced by the Statistical Office for the European Communities (“Eurostat”). The applicable threshold and fixed instalment for each of a series of bands of price level indices are set out in a table in regulation 58. Where no data is available from Eurostat, data from the World Bank will be used. If there is no data available from the World Bank in relation to a country, the applicable threshold and fixed instalment for band A will apply.

Regulation 59 provides for borrowers returning to the United Kingdom to cease making repayments under this part of the Regulations.

Regulation 60 provides that the Department may require a defaulting borrower to repay the whole of his loan immediately.