Call to rethink student loan rules for maternity leave

The Scottish Greens have called for changes to be made to student loan rules to stop interest accruing for people who take maternity or paternity leave.

Ross Greer, the party’s education spokesman, has pushed university minister Richard Lochhead to change the rules, which have seen some women take years longer to pay off student debt than men.

In response to a parliamentary question last year, Lochhead said the legislation which created the issue was UK-wide.

Greer said: “The Scottish Government must end the student loan maternity scandal immediately and it is not a difficult thing to do.

“Allowing interest to accrue on the student loans of those on maternity leave is grossly unfair and cannot continue.

“I’m calling, once again, on the universities minister to recognise that this situation is wholly unacceptable and for him to commit to pausing interest on loans during periods of maternity leave.

“Blaming this long-running unfairness on Covid and Brexit just doesn’t wash.

“The Scottish Government has already announced plans to make others changes to the relevant laws in the next few months, so there is absolutely no reason why it cannot correct this injustice to women at the same time.”

The issue was raised last year by Sabina Kadic-Mackenzie, a partner at Charlotte Street Partners, who has yet to pay off her student debt 14 years after graduating, despite her husband – who studied the same course at the same university – being close to paying off his.

Ms Kadic-Mackenzie said on Twitter: “We studied at the same time, same course, same uni. The difference is that I have a womb and took two periods of mat leave after the birth of our children (shared parental leave wasn’t a thing when I had mine)… anyway, it’s mostly women who take time off, despite new legislation.

“And so, two lots of mat leave meant two periods of not paying anything to my loan. Fair you might say.

“But, here’s the bit … the interest is allowed to build while a woman is on mat leave, in my case cancelling out a big chunk of what I paid to my loan up to motherhood.”

In response to a parliamentary question submitted by Greer last year, Lochhead said the issue was part of UK legislation.

He added: “There are currently no circumstances whereby interest would stop accruing (unless repaid in full, or written off).

“As a result, where a borrower is on maternity/paternity leave there is no provision in these UK regulations to prevent or pause the accruing of interest in these circumstances.

“However, the interest rate on student loans that impacts Scottish students is based on the lower of either the Bank of England base rate +1% or the Retail Price Index (RPI).

“The current interest rate for Scottish borrowers is 1.1%. This compares to other borrowers in the rest of the UK who are repaying on different plan types where the interest rate is 5.4%.”