Irish student loan repayments expected to fall by 20% in April
Student loan repayMENTS are expected to be lower in April than previously expected, with average repayment rates falling by about 20% according to data from the Department of Finance.
In April, student loans were estimated to be at a total of €2.3bn, down from a record €2bn in March.
The total amount owed by students and parents on loans of up to €60,000 was estimated to have fallen by €3.2bn, by a record 5.2%.
The data shows that over the last five years, the average amount owed to parents by their students on student loans has fallen by 8.4% per annum, the highest annual drop in a decade.
Average payments were €3,932 per student on average in the three months to April.
This was down from €4,091 in March and €4 and a half on average, the lowest average since May 2016.
The latest figures show that the average interest rate for all borrowers was 6.9% on loans over €60.
The average interest on loans under €60 was 6% on average.
The Department of Education said the lower interest rate was due to a lower number of borrowers in line for the payments.
It said it would be making further progress in the coming months.
The data also shows that there was a decrease in the number of payments being made by parents to their children, as they continue to work and study.
The average amount that parents were paying to their child on a loan of up $80,000 has fallen from $1,724 to $917, and the average total amount for the year has fallen to $2,846.
Average repayment rates of those who received their first payment were also lower.
The figures show the average repayment rate for those who took their first payments in April to be 6.8%, compared to 7.3% for those whose first payments were in March to be 8.5%.
The figures come as the Government prepares to release the latest statistics on the State’s finances, in a bid to reassure the public about the Government’s financial position.
Earlier this week, Finance Minister Michael Noonan said the Government would provide more details on its economic forecast for April.
The figures will also be of concern for parents as they have already been warned about their ability to repay student loans.
The Irish Times contacted the Department for Education and the Department on behalf of The Irish Daily, and did not receive a response.