Stop the Sale of Student Loans: UPDATEBy Sj.Cliff
We recently posted the article “Stop the sale of Student Loans”, detailing the changes that privatising the student loans would bring to you.
With the online petition hitting over 16,000 signatures, the relevant Government department has issued a response.
It would seem that there is still a “clear intention” to sell the loans to private companies but Universities Minister David Willetts has told a committee of MPs that there would have to be a final assessment before they “push the button”.
In this response, the government re-affirms that interest rates on loans take out before September 2012 won’t be affected by the sale and that commercial owned contracts would follow the same lines.
Willett’s told the Business, Innovation and Skills Select Committee that they are looking into the possibility of creating a ‘Synthetic hedge,’ this is a system where any company that bought the loans had to guarantee to future payments based on today’s rates.
In our previous article we stated that any lifting on the cap would mean that the current rate of 1.5% would rise to 3.6%. The rhetoric coming from Mr Willetts and the government is that it will stay at this and they would put terms and conditions into any buyers honouring this cap.
Maybe the government will do this. But the statement yesterday has not set these conditions into place. By Willetts own admission the proposed ‘synthetic hedge’ system has no international example on how this would operate.
This could still be a reality for those who had loans before 2012 and again like we stated in our original article those who have taken out loans since 2012 are exempt from this, as you guys will be paying at least 3% regardless.
We at The Student Guide still stand by the fact we don’t want the debt selling off. We must keep in mind what David Willetts said, that government still needs to have a final assessment of the loan sale before they “push the button,” so within this everything could change.