Government may sell 40 billion pound student loan book - report

LONDON Sun May 5, 2013 2:42pm BST

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LONDON (Reuters) - The government is considering whether to sell its 40 billion pound student loan book as part of a series of privatisations that includes selling off the Royal Mail Group, the Sunday Times newspaper said.

The government is testing the market with the sale of a 900 million pound tranche of loans, which was announced by Business Secretary Vince Cable on March 26. The newspaper said that the government was now looking at wholesale privatisation.

It said that the sale of the loan book may not raise a significant sum but would slash public debt by removing the loans from the government's balance sheet.

The Student Loans Company, which lends out about 5.5 billion pounds a year, had 28 billion pounds of loans outstanding at the end of March 2012. Senior civil servants say a hike in tuition fees could drive up the total to 40 billion pounds, the newspaper said.

The Department for Business, Innovation & Skills, which oversees the Student Loans Company, declined to comment.

(Reporting by Brenda Goh; Editing by Hugh Lawson)

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Comments (1)
ricowarrior wrote:
What happens to the student’s in debt? How are they affected? Will interest rates rise as a result of this?
Totally irresponsible by this government. Student loans are considered an asset as they are to be repaid, and they are also a source of income as they create an income stream (interest). Royal Mail is another example of poor privatising – the revenue side was sold off, leaving only the debt ridden part of the company in public hands, of course it was always going to struggle as a result!

May 05, 2013 7:02pm BST  --  Report as abuse
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