Student Loan Sale
November 25, 2013 by staff
Student Loan Sale, A debt management consortium has bought the loans
The Government has sold off student loans totalling almost £900m to a private debt collection agency for £160m amid warnings of an impact on every taxpayer.
The sale, revealed over the weekend by Sky’s City Editor Mark Kleinman, covers loans taken out by 250,000 students who began courses between 1990 and 1998 amid intensifying efforts in Government to raise money for the public purse from the student loan book.
The National Union of Students (NUS) was quick to criticise the sale, telling Sky News it amounted to “the public subsidising a private company making a profit from public debt.”
The Department for Business Innovation & Skills (BIS) said Erudio Student Loans was selected as the successful bidder through a “competitive process”.
It said its offer was judged to represent the best value for money for the taxpayer and the price paid exceeded the estimated value to the Government of retaining the loans, which have a poor return rate.
Of the 250,000 loans sold, around 46% are earning below the repayment threshold, 14% of borrowers are still repaying and 40% are not repaying their loans in accordance with their terms.
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