Next Blow to Education: Privatisation of the Student Loan Book

In June this year, Danny Alexander, Chief Secretary to the Treasury, confirmed that the government would be privatising the student loan book as part of a greater flogging of state assets in order to raise £15 billion.

On Wednesday 20th November, the Student Assembly is calling for students to gather in various forms of protest against the proposed privatisation of the student loan book by our government.

In June this year, Danny Alexander, Chief Secretary to the Treasury, confirmed that the government would be privatising the student loan book as part of a greater flogging of state assets in order to raise £15 billion.

This plan will inevitably result in a financial hammer-blow to students and graduates. In order to make the deal more appetising to potential buyers, the government has already looked at increasing - or even eradicating - the cap on interest currently in place for those who took out loans between 1998 and 2012. Therefore, decades down the line, those who would otherwise have paid off their student loans would still be indebted to whichever private entity owns the loan book.

However, students may find comfort in the assurances of the President of the NUS, Toni Pearce, who last month stated that 'David Willets has written to us to confirm that the Government will not change the method of determining interest rates for those borrowers who took out loans prior to 2012'. But I'd suggest that there is every chance that the wool is being pulled over our eyes by the Minister of State for Universities and Science.

In order to land a lump sum from a private buyer, the government will definitely look to wangle in some form of sweetener. One such possibility is an artificial replication of the change: paying the private buyer the difference between actual cash flow and what could have been received without a cap. This is miserably pathetic.

For a start, it would mean the transfer of taxpayers' money into the pockets of a private owner (ring any bells?) which just isn't fair. The government will also be aware that it won't have to find room in the budget for these payments as it can be fobbed off on future governments. It is a quick resolution with longer term repercussions.

Education is being tormented by this government and it is about time we took action. Just last month Clegg had to 'reassure' us that tuition fees wouldn't be hiked to £16,000 (meaning talks have definitely taken place on this matter). Then earlier this month university staff held a strike due to their pathetic 1% pay increase while senior managers are gifted pay rises exceeding inflation.

The Con-Dems are tampering with education as well as other vulnerable sections of society. Hopefully Labour will recognise the opportunity to increase their support and defend our universities and our students. But until then, as those holding the power in our institutions, students must make themselves heard. A great start is on the 20th of November.

Close

What's Hot