Answers needed on proposed student loan sell-off

4.19.26pm GMT Fri 23rd Mar 2007

Welsh Liberal Democrat Education spokesperson, Peter Black, has raised concerns over reports that the Government is planning to sell off the loan debt owed by thousands of former students to the Student Loan Company.

The report, which can be found in this week's edition of 'Public Finance', suggests that a £6bn sale of the 'student loan book' and further financial and corporate asset sales would release assets of £36bn, up from £18bn, to fund frontline services.

"This announcement will cause some concern for the many former students who took out loans to help them secure their degree," said Mr. Black. "Those who are paying back their loans to the Student Loan Company at present pay interest in line with inflation. They need to know what is planned for them. Will there be a rise in the interest rate or a more vigorous pursuit of repayments if this sale goes ahead?"

"The Welsh Liberal Democrats have warned all along that getting students into 'mortgage-style' debt just at the point when they are starting out on their careers and perhaps embarking on family life makes no sense. This kind of uncertainty does not help. Graduates need some reassurances as to the impact of this sale on their future financial security."