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Student loans 'to be sold'
Wednesday, 07 November 2007
Life after graduation
Following the beginning of a new parliamentary session, the government has confirmed that it will allow the sale of student loan debt.
The sale of student loans bill, announced this week during the Queen's speech, will allow students' secretary Lord Triesman to sell parts of the income-based student loans to third-party purchasers, as well as sharing personal information regarding the loans with them.
In response to the bill, Gemma Tumelty, president of the National Union of Students (NUS), 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 and conditions or increased interest rates.
"The fact that the government is yet again selling off the student loan book raises questions about the long-term sustainability of a funding system that encourages long-term debt," she added, drawing comparisons to recent events in the US and the risks associated with selling off debt.
The student loan book is estimated to be worth £18.1 billion, a figure that is expected to rise to more than £55 billion within the next decade. The government insisted that it will retain control of all loan conditions, including interest rates and repayment levels.