Regulation 58 Insertion of regulation 74A (how to calculate fixed instalment rate)I1

After regulation 74 (repayment by fixed instalments) insert—

“How to calculate fixed instalment rate

74A.

(1)

The fixed instalment rate for a plan 2, 3 or 5 loan is the result of the formula—

(a)

calculated on the 6th of April of each year, and

(b)

rounded down to the nearest £1 (if necessary).

(2)

The formula is—

(3)

In the formula—

• “x” means the median salary for graduates (to the nearest £500) in the most-recent year published by the Department for Education^f1;

• “y” means the repayment threshold for the loan.

  Example
  On 6th April, £36,000 is the median salary and £27,295 is the repayment threshold. £36,000 multiplied by two is £72,000. £27,295 subtracted from £72,000 is £44,705. £44,705 multiplied by 0.09 is £4,023.45. £4,023.45 divided by 12 is £335.29. The fixed instalment rate is £335 (rounded down to the nearest £1).

”.