According to the BBC, Universities Minister David Willetts has confirmed that there is a “clear intention” to sell to a private buyer the student loans taken out to cover higher tuition fees, but he said this would not mean a change of terms for student repayments…
…MPs were also told that selling off loans was not a pre-condition of plans to expand student numbers.
Mr Willetts, facing questions from the Business, Innovation and Skills Select Committee, gave the clearest signal so far of plans to sell “income-contingent” student loans borrowed after the introduction of tuition fees.
There have been previous sales of earlier forms of student loans to private companies, but this would be the first time that the system brought in with tuition fees would face a loans sell-off.
“There is a clear intention to sell, we believe we can do it, but there is a final assessment before we push the button,” the minister told MPs.
Mr Willetts said governments had always withheld the right to alter students’ terms of repayment, but that the sale of loans should not be seen as meaning that payment rates would change.
The contract with the commercial owner would be expected to specify these terms, Mr Willetts told the committee.
The sale would be a multi-staged process, MPs were told, not least because future cohorts of students would create more loans and debts in the future.
Mr Willetts said this was not a “one-off asset” like shares in an industry that was being privatised.
The minister was asked whether wider plans to expand student numbers would be “totally screwed” without the funds raised by selling loans.
But MPs were told that the removal on restrictions on student numbers was not dependent on such extra funding…