Skip to main content

Privatisation of Student Loans

Volume 579: debated on Monday 28 April 2014

The Petition of residents of Durham and students of Durham University,

Declares that the Petitioners believe that selling the student loan book to the private sector would be a disastrous move; further that the Petitioners believe that in order to make the student loan book profitable for private companies, privatisation would need to be accompanied by an increase in the financial burden placed on graduates; and further that the Petitioners believe that student debt has already reached huge levels and increasing the burden of debt further, as is inevitable if student loans are privatised, would be grossly unfair and equivalent to a huge retroactive hike in tuition fees.

The Petitioners therefore request that the House of Commons urges the Government to abandon the sale of the student loan book to private companies.

And the Petitioners remain, etc.—[Presented by Roberta Blackman-Woods, Official Report, 25 March 2014; Vol. 578, c. 318.]

[P001336]

Observations from the Secretary of State for Business, Innovation and Skills, received 15April 2014:

The intention to realise value for the taxpayer through sales from the pre-2012 Income Contingent Repayment (ICR) student loan book was announced by the Chancellor in his December 2013 Autumn Statement.

Preparations are underway for a potential sale of the first tranche of loans from this book before the end of financial year 2015-16.

A key requirement of the sale is that the terms of the loans are not altered to the borrower’s detriment. Purchasers of loans will have no power to amend the terms of repayment, which have been fixed in advance of the first sale taking place.

The sale will create no additional burden in terms of the amount to be repaid by students or graduates who have taken out pre-2012 ICR loans and in no way constitutes a retrospective hike in the fees they paid to attend university.