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Stop Selling Student Loans

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An e-petition has been created to stop the sale of student loans.

MoneyDr Thomas Richard Bowers has started an e-petition that hopes to encourage the Government to drop the proposed sale of student loans taken from 1998 to 2012. The proposal was announced on 27th June 2013 in Parliament in collaboration with a wider sale of public assets that were worth around £15 billion. With already 2,002 signatures and just under a year left till the petition ends, far-reaching changes could be on the horizon.

The petition is a reaction against plans formulated by ministers, which would auction the remaining student loans that were issued between 1990 and 1998. With an estimated value of £900m, the loans are predicted to be sold for only a tiny proportion of their value.

Dr Bowers petition argues that by selling the student loans to the private sector, the Government would potentially lose a permanent source of revenue to the Treasury.

Instead, the Government will risk sacrificing revenue for insufficient gains and may provide private financial businesses with profits, instead of re-investing back into the struggling UK economy.

As well as selling student loans, the proposal also suggested removing the current cap on student loan interest rates.

If the cap was removed, it would burden UK graduates with such large loans that they may be unable to repay them. Interest rates may rise to a staggering 3.6%. In comparison, student debt taken out before 2012 had a significantly smaller rate of 1.5%.

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