Explanatory note

These Regulations amend the Education (Student Loans) (Repayment) Regulations 2000 (“the Principal Regulations”) to reflect changes introduced by the Sale of Student Loans Act 2008 (“the 2008 Act”), to make changes to the recovery of student loan payments from employers and to make other minor amendments.

Regulation 2 provides that the changes introduced by the 2008 Act only apply in England. The changes to the system of recovery of student loans from employers apply across the UK.

Part 2 deals with the changes consequent on the 2008 Act. That Act allows the Secretary of State to sell the right to repayment of income-contingent repayment student loans to private sector organisations. A buyer of a loan or loans is referred to in the Act and these Regulations as the ‘loan purchaser’. Loans for which the right to repayments have been sold by the Secretary of State are referred to as ‘transferred loans’. This does not include loans made by Welsh Ministers. These Regulations amend the Principal Regulations by inserting a new regulation 4A to allow repayments of transferred loans to be passed to the loan purchaser (regulation 7; see also section 6(2) of the 2008 Act).

The amendments to the Principal Regulations substitute the loan purchaser for the Secretary of State in those places, listed in the inserted regulation 3(7)(a), where the purchaser is to be the lender of record. In those places referred to in the inserted regulation 3(7)(b), references to the Secretary of State are treated in relation to transferred loans as being references to the Secretary of State acting on behalf of the loan purchaser in loan administration under the Principal Regulations (regulation 5). All other references to the Secretary of State are unaffected. The Secretary of State may continue to delegate functions in accordance with section 23(4) of the Teaching and Higher Education Act 1998. The existing processes used by Her Majesty’s Revenue and Customs (HMRC) (referred to in the Principal Regulations as the Board) for collection through self-assessment and Pay As You Earn (PAYE) are continued for transferred loans but are otherwise unaffected. Repayment methods by borrowers are also unaffected.

The Regulations allow the Secretary of State to recover costs from borrowers incurred on behalf of loan purchasers under Part 2 of the Principal Regulations (regulation 10). They also insert a new regulation 67 into the Principal Regulations to allow the Secretary of State to recover, on his own and loan purchasers’ behalf, costs incurred in obtaining information or payment from borrowers resident overseas (regulation 14).

Part 3 allows HMRC to collect outstanding student loan repayments and any interest due on them from employers together with other outstanding amounts of tax, national insurance or payments under the Construction Industry Scheme Regulations without having to differentiate between the various components. The amendments allow proceedings to be taken in relation to the whole sum.

An impact assessment has not been prepared in respect of this instrument as it has no impact on the costs of business, charities or voluntary bodies. The impact on the public sector is minimal.