Principal, interest and payments
1(1)Regulations made by the Secretary of State shall—
(a)prescribe the maximum amount of the loan that may be made to a student in any year;
(b)make provision as to the time and manner in which repayments of loans are to be made; and
(c)make provision for the deferment or cancellation of a borrower’s liability in respect of a loan.
(2)The maximum amount prescribed under sub-paragraph (1)(a) above for the loan to be made to a student in any year shall not exceed—
(a)the amount specified as the ordinary maintenance requirement for students of the class or description to which he belongs by regulations having effect for that year under section 1(1) of the [1962 c. 12.] Education Act 1962 (mandatory awards); or
(b)if no such amount is specified for students of the class or description to which he belongs, such amount as the Secretary of State considers appropriate for students of that class or description having regard to the amount specified as mentioned in paragraph (a) above;
but regulations, other than the first, made under sub-paragraph (1)(a) above may prescribe a higher maximum if a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.
(3)Regulations under sub-paragraph (1)(b) above shall make such separate provision as the Secretary of State considers appropriate with respect to the repayment of loans by borrowers who are disabled.
(4)Loans shall bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State but so that—
(a)the interest (which shall accrue from day to day) shall be added to the outstanding amount of a loan; and
(b)the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms.
(5)For the purposes of sub-paragraph (4)(b) above the Secretary of State shall have regard to the retail prices index published by the Central Statistical Office of the Chancellor of the Exchequer, any substituted index or index figures published by that Office or such other index as appears to him to be appropriate.