pound;10bn loans debt sale halted

3rd September 1999 at 01:00
The Department for Education and Employment has admitted that it has been unable to sell off its pound;10 billion student loans debt to the private sector.

The admission, made during an education and employment select committee meeting this week, led to accusations of a government cover-up.

Nick Sanders, the DFEE's director of higher education, said the third tranche of sales was being deferred. He confirmed that the department could not get satisfactory terms for the sale.

This led to speculation that the loans are not being recouped.

Nick St Aubyn, Conservative MP for Guildford, said: "What emerged today is that the Government was planning to raise billions of pounds from the sale of the student loans book. They halted the process. If the Government is not getting the money in that it expected from student loans it may affect the funding of higher education in the future."

He said the information about the deferral had not emerged before and was a part of a cover- up: "The Government has realised that it's done a lousy deal for the tax payer."

Lib-Dem committee member Phil Willis has called for a ministerial statement on the loan debt sell-off. The DFEE has completed two tranches of loan debt pay-offs, selling to clearing banks. The debts were worth pound;1bn and pound;2bn, and a government source said the revenue contributed towards Labour's extra pound;800 million education spending.

In future, student debts will be collected directly by the Inland Revenue.

Subscribe to get access to the content on this page.

If you are already a Tes/ Tes Scotland subscriber please log in with your username or email address to get full access to our back issues, CPD library and membership plus page.

Not a subscriber? Find out more about our subscription offers.
Subscribe now
Existing subscriber?
Enter subscription number


The guide by your side – ensuring you are always up to date with the latest in education.

Get Tes magazine online and delivered to your door. Stay up to date with the latest research, teacher innovation and insight, plus classroom tips and techniques with a Tes magazine subscription.
With a Tes magazine subscription you get exclusive access to our CPD library. Including our New Teachers’ special for NQTS, Ed Tech, How to Get a Job, Trip Planner, Ed Biz Special and all Tes back issues.

Subscribe now