Coalition confirm plans to privatise student loans
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The Government today confirmed their plans to sell-off the student loan book to private investors, placing graduate debt in the hands of private companies. Speaking to the House of Commons Danny Alexander, the Chief Secretary to the Treasury confirmed the plans which would see the Coalition receive an immediate lump sum for the student loan book with buyers collected the remainder of the loan payments – valued at £40billion. Talking about the plans Alexander said,“We will take action to sell off £15 billion worth of public assets by 2020. £10 billion of that money will come from corporate and financial assets like the student loan book. Mr Speaker, government is the custodian of the taxpayers’ assets. When we no longer need them, we should sell them back at a fair price.” This has renewed speculation that, in order to make the debt more attractive to investors, the Government would seek to raise interest rates on student loans taken out since 1998. The sale of student loans isn’t expected to be finalised until 2015.