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<p>The student funding system removes financial barriers for anyone hoping to study
and is backed by the taxpayer. A key feature of the scheme is that outstanding debt
– including any interest accrued that has not been repaid by the end of the loan term
– is written off after 30 years. This means that borrowers are protected if their
repayments are less than the interest accruing on their accounts.</p><p> </p><p>Monthly
student loan repayments are linked to income, not to interest rates or the amount
borrowed. Borrowers earning less than the repayment threshold (£21,000) repay nothing
at all.</p><p> </p><p>Once borrowers leave study, those earning less than £21,000
are charged an interest rate of RPI only. Post-study interest rates are variable based
on income, tapering up from RPI for those earning less than £21,000 to RPI+3% for
borrowers earning £41,000 and above. The system of variable interest rates based on
income makes the system more progressive, as higher earners contribute more to the
sustainability of the higher education system.</p><p> </p><p>We have a world class
student finance system that is working well, and that has led to record numbers of
disadvantaged students benefiting from higher education. As ever, we will keep the
detailed features of the system under review to ensure it remains fair and effective.</p><p>
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