Education (Student Loans) Act 1998

Terms of loans

2 Regulations to prescribe certain terms of student loan agreements

(1) Paragraph 1 of Schedule 2 to the 1990 Act (public sector student loans: principal, interest and payments) shall be amended as follows.

(2) In paragraph 1(1), for paragraphs (b) and (c) there shall be substituted—

“(b) require the terms of every agreement for a public sector student loan to include—

(i) such terms relating to the time and manner of repayments,

(ii) such terms relating to the interest to be borne by the loan, and

(iii) such terms under which the borrower’s liability may be deferred or cancelled,

as are prescribed by the regulations.”

(3) In paragraph 1(3), for “under sub-paragraph (1)(b) above” there shall be substituted “made in pursuance of sub-paragraph (1)(b)(i) above”.

(4) For paragraph 1(4) and (5) there shall be substituted—

“(4) Regulations made in pursuance of sub-paragraph (1)(b)(ii) above shall make such provision with respect to the rate of interest for the time being applicable to a public sector student loan as the Secretary of State considers appropriate to maintain the value in real terms of the outstanding amount of the loan.

(5) The provision required by sub-paragraph (4) above shall be framed by reference to such index of prices as may be specified in, or determined in accordance with, the regulations.”

(5) After paragraph 1(5) (as substituted by subsection (4) above) there shall be inserted—

“(6) Nothing in any regulations under sub-paragraph (1)(b) above shall affect the terms of any agreement for a public sector student loan entered into before the date of the coming into force of the regulations.”

(6) Where an agreement for a public sector student loan was entered into before the commencement of this section, then as from that time—

(a) the agreement shall have effect as if its terms included the terms prescribed in relation to such an agreement by regulations in force at that time under paragraph 1(1)(b) of Schedule 2 to the 1990 Act as amended by subsection (2) above; and

(b) the prescribed terms shall have effect in accordance with paragraph (a) above in place of any of the existing terms of the agreement that make provision for any of the matters for which provision is made by the prescribed terms.

(7) Paragraph 1(6) of Schedule 2 to the 1990 Act, as inserted by subsection (5) above, accordingly has effect subject to subsection (6) above.