Student loans 'to be sold off'
Published 24/11/2013 | 19:21
The Government is set to sell off £900 million of student loans tomorrow as part of its efforts to balance the nation's books.
The portfolio of loans, taken out by students in the 1990s, will be sold to a private debt collection agency, Sky News reported.
The project to find a buyer for the remaining mortgage-style loans was launched earlier this year, when Universities Minister David Willetts said the plan would "maximise the value of one of the Government's assets".
The loans, taken out between 1990 and 1998, have a face value of around £900 million but the market value is likely to be significantly lower.
There were two previous sales of mortgage-style loans in 1998 and 1999 and those remaining in Government ownership are mostly either in deferment or in arrears, so total annual repayments are low.
At the time the sale was announced in March, Mr Willetts said: "Selling the remaining mortgage-style student loans will allow us to reduce public debt and maximise the value of one of the government's assets.
"The private sector's expertise makes it well placed to collect this debt and the sale will also help the Student Loans Company to concentrate on providing loans to current students."
The terms and conditions for borrowers who took out mortgage-style loans will not change as a result of the sale.