(This note is not part of the Regulations)
These Regulations amend the Education (Student Loans) (Repayment) Regulations 2000 (S.I. 2000/944) (“the principal Regulations”).
Under section 44 of the Higher Education Act 2004 certain student support functions of the Secretary of State under section 22 of the Teaching and Higher Education Act 1998 were transferred to the Welsh Ministers.
Regulation 3 inserts new paragraphs into regulation 2 of the principal Regulations to the effect that any reference in any provision in Part 1 or 2 of the principal Regulations, is to be read, in relation to student loans made by the Welsh Ministers as a reference to the Welsh Ministers.
Regulation 4 amends the definition of “Secretary of State” in regulation 3 of the principal Regulations.
Regulation 5 inserts a new definition into regulation 9 of the principal Regulations.
Regulation 6 inserts a new regulation 12 into the principal Regulations in relation to Wales. The Welsh Ministers write off a borrower’s liability to repay his or her 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. Certain categories of borrowers who took out loans for courses starting on or after 1 September 2006 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 7 substitutes a new Part 5 to the principal Regulations, inserting new regulations 53 to 57C in relation to Wales. This Part deals with repayment of student loans by borrowers who move overseas following their courses of higher education. Borrowers are under a duty to notify the Welsh Ministers 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 Welsh Ministers may serve a notice upon him or her requiring him or her to repay his or her loan in accordance with the principal Regulations. In such a notice, the Welsh Ministers may require the borrower who has failed to provide them with information required under regulation 54 of the principal Regulations to make a repayment to reduce the amount outstanding on his or her 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 57A.
Under regulation 57 of the principal Regulations a borrower who has complied with a request for information may repay his or her 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 or she can repay in accordance with regulations 56 and 57. The borrower may also seek a re-determination of his or her income-related instalments during the 12 month period.
Regulation 57A 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 57A. 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 57B provides for borrowers returning to the United Kingdom to cease making repayments under this part of the Regulations.
Regulation 57C provides that the Welsh Ministers may require a defaulting borrower to repay the whole of his or her loan.