Government lost £600 million selling off student loans
The independent National Audit Office has slammed the government for selling off student loans with a £600 million discount to private companies, including hedge funds.
The government sold a batch of student loans last autumn, which the Department of Education valued at around £2.6 billion. Rather mysteriously, the treasury then sold these loans on to specialist investors for a mere £1.7 billion. After accounting for likely non-payments, the total loss amounted to over £600 million.
Student loans are quickly becoming one of the largest government assets. The total value of student debt in England currently stands at £100 billion, but is expected to balloon to £470 billion by 2049.
Peter Dowd MP, Labour’s Shadow Chief Secretary to the Treasury, slammed the deal, and questioned the usurious interest rates which are seeing students continually ripped off:
“The loss of £600 million of taxpayers’ money on the sale of student loans is a disgrace.
“The Tories’ claim that they champion the taxpayer is simply hollow. When will they stop ripping off the taxpayer?
“All the while students suffer with high debts, driven up by more than £16,000 due to a flawed Government interest rate – designed to guarantee the value of the loan book to private investors.
“The next Labour government will end this Tory unfairness by abolishing student fees once and for all.”