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Scottish budget to 2015-16 – student loans

September 30, 2013

This table sets out the figures for net student loans advanced and the resource cost to the government (the “RAB charge”) of making loans.  The RAB charge is calculated as a percentage of gross loans advanced.

  2012-13 2013-14 2014-15 2015-16
£m £m £m £m
Cost of providing loans Previous plans 88.4 134(+51%) 181.6(+35%) n/a
New plans n/a 134 181.6 302.1(+66%)
Net loans advanced Previous plans 241.3 408.3(+69%) 468.3(+15%) n/a
New plans n/a 408.3 468.3 468.3(+0%)

Detailed figures from Table 5.07 in each draft budget document.

The notable feature here is the 66% rise in the RAB charge expected in 2015-16, while the estimate for net loans remain flat. This is not explained in the draft budget document.

Possible explanations would be an expected very sharp rise in the RAB charge from its current level of around 30%  (unlikely) or expectation of a large rise in gross loans advanced (more likely, although current policies provide no reason to expect this).

Student loans and the RAB charge are both ring-fenced within the Scottish Block and so the Scottish Government may simply be entering the amounts passed to it for each of these by the UK government.

Even then, however, this is an unusual pattern and it will be interesting to see if  anything emerges to explain it during scrutiny of the budget by the Scottish Parliament.

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