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Student loan privatisation scrapped by Lib Dems Watch

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    Lib Dems' Vince Cable and Nick Clegg have decided to scrap the government plan to sell off the student loan book, which would've brought in an estimated £12 billion to the treasury.

    It was Conservative Chancellor George Osborne's plan to use the money to pay for the removal of the cap on university student numbers, which is set to come into place in 2015.

    Now, according to the head of the elite Russell Group universities Wendy Piatt, there's a black hole in the funding for removing the cap, and therefore the government should now "abandon" the idea.

    There are other options for the government though if they're keen to press on with the cap removal: a further raising of tuition fees, or a spike in the interest on past and current students' loan repayments.
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    The fees are high enough already, there's no need to raise them. How about the government are made to back in full the cost of their second, third houses etc instead of using tax payers money.
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    There are other options for the government though if they're keen to press on with the cap removal: a further raising of tuition fees, or a spike in the interest on past and current students' loan repayments.
    That's the most likely outcome. Selling the debt would have made this impossible, so backtracking on that is probably the prelude.
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    (Original post by Observatory)
    That's the most likely outcome. Selling the debt would have made this impossible, so backtracking on that is probably the prelude.
    Prelude to what? I don't quite follow you...
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    (Original post by Numberwang)
    Prelude to what? I don't quite follow you...
    To retroactively altering the terms of the loans.
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    (Original post by Numberwang)
    Lib Dems' Vince Cable and Nick Clegg have decided to scrap the government plan to sell off the student loan book, which would've brought in an estimated £12 billion to the treasury.

    It was Conservative Chancellor George Osborne's plan to use the money to pay for the removal of the cap on university student numbers, which is set to come into place in 2015.

    Now, according to the head of the elite Russell Group universities Wendy Piatt, there's a black hole in the funding for removing the cap, and therefore the government should now "abandon" the idea.

    There are other options for the government though if they're keen to press on with the cap removal: a further raising of tuition fees, or a spike in the interest on past and current students' loan repayments.
    I thought student loans were interest free. I wasn't informed of any interest rate when I signed up...
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    (Original post by kayleighisonfire)
    The fees are high enough already, there's no need to raise them. How about the government are made to back in full the cost of their second, third houses etc instead of using tax payers money.
    Many don't earn enough to do this, MP's don't get that much money as a salary.

    Also this would make such a tiny dent in government expenditure, it wouldn't change anything.
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    (Original post by cBay)
    I thought student loans were interest free. I wasn't informed of any interest rate when I signed up...
    They are absolutely not interest free, you should read the contract again.
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    It wasn't a sustainable plan, anyway. They were going to remove a steady source of income (the repayments), in return for a lump sum. If they wanted to fund something which will have a continual cost such as more students, rather than capital investment, it'd have made more sense not to privatise the loans. The real purpose was to massage the financial figures for the year leading up to the election!
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    (Original post by cBay)
    I thought student loans were interest free. I wasn't informed of any interest rate when I signed up...
    The interest rate is RPI + 1-3% (the latter depending on which salary band you are in) afaik.
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    as i understand it, the reason behind the privatisation was to give the government money a percentage of unpaid loans up front in exchange for a private company taking on the loans and taking more money than they paid the government for the rights to these loans.

    whats the logic behind that when over the long run it loses the government money and in any case the value they get right now only represents a drop in the ocean when the total annual budget of the UK government is £700bn?
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    (Original post by woodchuck)
    as i understand it, the reason behind the privatisation was to give the government money a percentage of unpaid loans up front in exchange for a private company taking on the loans and taking more money than they paid the government for the rights to these loans.

    whats the logic behind that when over the long run it loses the government money and in any case the value they get right now only represents a drop in the ocean when the total annual budget of the UK government is £700bn?
    The logic is it makes the financial figures superficially look better when the Tories are running their election campaign for next year.
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    Would this sell off if it did go ahead affected historic loans of those already graduated or those in univeristy at present and those soon to graduate ?
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    (Original post by Luketreherne)
    Would this sell off if it did go ahead affected historic loans of those already graduated or those in univeristy at present and those soon to graduate ?
    I would say both but most certainly historic debt.


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    (Original post by Luketreherne)
    Would this sell off if it did go ahead affected historic loans of those already graduated or those in univeristy at present and those soon to graduate ?

    (Original post by miscounted_time)
    I would say both but most certainly historic debt.


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    Only those who started before 2012 - the new system is so clearly economically unviable that even the investment bankers didn't so much as pretend to be interested.
 
 
 
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