Interview: Dr Thomas Richard Bowers - 'Stop Selling Student Loans' e-petition creator
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Following on from our coverage of ‘Stop Selling Student Loans’ Dr Thomas Richard Bowers, creator of the ‘Stop the Sale of Student Loans’ e-petition discusses in an interview with The National Student, why he felt the need to petition against selling student loans. Now with 7,181 signatures, Dr Bowers is determined to reach his target of 10,000 and to gain an official response from the government. What do you think motivated the Government to consider selling student loans? The current Government set itself a near impossible target of balancing the UK's books by the end of its first term in power via a huge austerity drive and cuts to the public sector, and has doggedly pursued this course despite the advice of the IMF. In order to help achieve their goal, they are looking at selling off publicly-owned financial and property assets, such as the student loan book, as part of a package worth about £15 billion. You mentioned about a ‘short-term gain’ on the e-petition, could you be more specific about this? If the Government does sell off the student loan book, they will make a one-off profit from it in the form of a lump sum and also take the outstanding loans off the public debt. This helps in their short-term goal of "cutting the deficit." However, the loan book as it stands is not a very attractive prospect to investors. Interest rates are currently capped at either the Bank of England Base Rate +1% or Retail Price Index (RPI), whichever is currently lowest. At the moment, this is 1.5% (Base rate +1%). This means that government may very well have to offer a "sweetener" to private investors, which may take the form of either a removal of the cap on interest rates, or basically compensating them with treasury funds if the loans do not return the expected profits.
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