THE GOVERNMENT are planning to sell off student
loan debts to private companies, it was revealed
in the Queen's Speech last week.
The Sale of Student
Loans Bill, which covers the proposal
to sell the student loan book and applies to
England and Wales, is expected to raise £6
billion over three years.
Under the Bill the student
loan fund will be sold to a third-party
purchaser, who will then disclose personal information
on the loans and make arrangements to sell them
on.
Current student debt stands at around £18.1
billion and is expected to treble by 2020.
With the sale of the debt many now fear that
the government has long-term ambitions to abandon
the inflation-only interest rate, and charge
higher commercial rates on their borrowings.
National Union of Students president, Gemma
Tumelty said: "Our primary concern is that
individual borrowers – students and graduates
– who have received loans, will not be
affected by these proposals through changes
in terms or conditions.
"Recent events in the US show the risks
associated with selling off debt and the consequences
it can produce in the wider economy".
The Student
Loans Company would continue to
administer all accounts and purchasers would
only be allowed to use data about borrowers
for the specific purpose of managing the loans.
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