PART 8 INTEREST AND INSOLVENCY

Interest

90.—(1) Subject to paragraph (2), loans bear interest at the rate which will result in an annual percentage rate of charge determined in accordance with the Consumer Credit (Total Charge for Credit) Regulations 1980(60) equal to the percentage increase between the retail prices all items index published by the Office for National Statistics for March 2006 and that index so published for March 2007.

(2) If the rate referred to in paragraph (1) exceeds the rate for the time being specified for the purposes of any exemption conferred by virtue of section 16(5)(b) of the Consumer Credit Act 1974(61) loans bear interest at the rate so specified.

(3) Interest is calculated on the principal outstanding daily and is added to the principal monthly.

(4) The index of prices to which the Secretary of State is required by section 22(8) of the 1998 Act(62) to have regard in prescribing the rate of interest which loans bear is the retail prices all items index mentioned in paragraph (1).

Insolvency

91.—(1) In England and Wales—

(a) there shall not be treated as part of a bankrupt’s estate or claimed for his estate under section 307 or 310 of the Insolvency Act 1986(63) any sum payable to an eligible student by way of a loan and which he receives or is entitled to receive after the commencement of the bankruptcy, whether his entitlement arises before or after the commencement of his bankruptcy; and

(b) there shall not be included in a person’s bankruptcy debts any debt or liability to which he is or may become subject in respect of any sum payable to an eligible student by way of a loan and which he receives or is entitled to receive—

(i) in the case of a bankruptcy commencing before 1st September 2004, after the commencement of the bankruptcy; or

(ii) in the case of a bankruptcy commencing on or after 1st September 2004, before or after the commencement of the bankruptcy.

(2) In Northern Ireland—

(a) there shall not be treated as part of a bankrupt’s estate or claimed for his estate under Article 280 or 283 of the Insolvency (Northern Ireland) Order 1989(64) any sum payable to an eligible student by way of a loan and which he receives or is entitled to receive after the commencement of the bankruptcy, whether his entitlement arises before or after the commencement of his bankruptcy; and

(b) there shall not be included in a person’s bankruptcy debts any debt or liability to which he is or may become subject in respect of any sum payable to an eligible student by way of loan and which he receives or is entitled to receive—

(i) in the case of a bankruptcy commencing before 1st March 2005, after the commencement of the bankruptcy; or

(ii) in the case of a bankruptcy commencing on or after 1st March 2005, before or after the commencement of the bankruptcy.

(3) In this regulation, “loan” means a loan pursuant to regulations made by the Secretary of State or the National Assembly for Wales under section 22 of the 1998 Act, including the interest on the loan and any penalties or charges incurred in connection with it.

PART 9 FINANCIAL ASSESSMENT

Calculation of contribution

92.—(1) An eligible student’s contribution in respect of an academic year is the amount, if any, calculated under Schedule 5.

(2) For the purposes of the exercise of the Secretary of State’s functions under the 1998 Act and regulations made under it he may require an eligible student to provide from time to time such information as he considers necessary as to the income of any person whose means are relevant to the assessment of the student’s contribution.

Application of contribution – current system students

93.  In the case of a current system student, the Secretary of State must apply the contribution in accordance with regulation 95 until it is extinguished.

Application of contribution – old system students

94.—(1) Subject to paragraph (3), where the basic amount of the grant for fees has been calculated in accordance with regulation 29(1) or 30(1), to determine the actual amount of grant for fees that is payable, the Secretary of State must first apply the contribution to reduce the basic amount of the grant for fees.

(2) If the contribution is not extinguished under paragraph (1), the Secretary of State must apply the remainder in accordance with regulation 95.

(3) Where the course is a course for the initial training of teachers (other than a course for a first degree), there is no deduction from the basic amount of the grant for fees under this regulation and the contribution is applied in accordance with regulation 95.

(4) Where the basic amount of the grant for fees has been calculated in accordance with regulation 29(2) or regulation 30(2) and one of the cases set out in regulation 22(3)(b), (d) or (e) applies, to determine the actual amount of the grant for fees that is payable, the Secretary of State must—

(a) first, apply the contribution to reduce the basic amount of the grant for fees;

(b) second, if the contribution is not extinguished, deduct an amount equal to the basic amount of the grant for fees from what is left of the contribution reducing the remainder of the contribution to no less than nil; and

(c) third, if the contribution is still not extinguished, apply the remainder in accordance with regulation 95.

(5) In the case of an Erasmus year, the Secretary of State must apply the amount by which the contribution exceeds £1,225 in accordance with regulation 95.

(6) Where none of the circumstances in paragraphs (1) to (5) apply, the contribution is applied in accordance with regulation 95.

Order of application

95.  The contribution or the remainder of the contribution, as the case may be, is to be applied as follows until it is extinguished—

(a) first, to reduce the amount of adult dependants’ grant calculated in accordance with regulation 46;

(b) second, to reduce the childcare grant calculated in accordance with regulation 46;

(c) third, to reduce the parents’ learning allowance calculated in accordance with regulation 46 (except the first £50 of the allowance);

(d) fourth, to reduce the loan for living costs for which the eligible student (other than a student with reduced entitlement) qualifies under Part 6 to no less than the minimum level for the academic year specified in regulation 96;

(e) fifth, to reduce the grant for travel calculated in accordance with Chapter 5 of Part 5.

Application of contribution to loan for living costs

96.—(1) Subject to paragraphs (2) and (3), the “minimum level for the academic year” in regulation 95(d) is—

(a) £2,620, in the case of a student in category A;

(b) £4,735, in the case of a student in category B;

(c) £4,030, in the case of a student in category C;

(d) £3,385, in the case of a student in category D.

(2) Subject to paragraph (3), where the academic year in question is the final year of a course other than an intensive course, the “minimum level for the academic year” is—

(a) £2,365, in the case of a student in category A;

(b) £4,315, in the case of a student in category B;

(c) £3,505, in the case of a student in category C;

(d) £3,130, in the case of a student in category D.

(3) Where different categories apply for different quarters of the academic year, the minimum levels in paragraphs (1) and (2) are the aggregate of the amounts determined under paragraph (4) for each of the quarters in respect of which a loan is payable.

(4) The amount determined for each quarter is one third of the amount in paragraph (1) or (2) which corresponds to the rate applicable for the quarter.

(5) The rate applicable for a quarter is determined in accordance with regulation 70.

(6) Categories A to D have the meaning given in regulation 77.

Amount of loan for living costs payable to certain type 1 and type 2 teacher training students

97.—(1) This regulation applies to type 1 and type 2 teacher training students who qualify for a maintenance grant and whose contribution exceeds nil.

(2) The loan for living costs payable in respect of an academic year to a student to whom this regulation applies is calculated as follows—

• where

• A is the amount of loan for living costs left after applying the contribution in accordance with this Part; and

• B is the amount of maintenance grant payable to the student.