The Government has lost more than £600m in future earnings as a result of its decision to sell off student loans “too cheaply”, the spending watchdog has warned. iNews reports
The National Audit Office has criticised both the Department for Education and the Treasury for failing to secure sufficient value for money for taxpayers when selling the student loan book.
According to a report published today by the watchdog, the DfE sold the first batch of income-based loans with a face value of £3.5bn for £1.7bn, securing 48p in every £1 of loans sold.
Treasury officials are keen to offload the loans to remove them from the Government’s books and avoid future write-offs of unpaid student loans.
Both the Treasury and the DfE use different methods to calculate the cost of student loans, raising the risk of the Government not knowing the full value of the debt and selling them too cheaply, the report states.
Earlier this week, the Office for Budget Responsibility estimated that the planned sell off would deprive the state of around £23bn in future revenue.
Amyas Morse, the head of the NAO, said: “The rapidly growing student loan book is a significant government asset, so I would expect to see greater consideration of the financial impact of selling and awareness of whether this provides value for money to taxpayers.”
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