THE Government has sold off almost £900 million of student loan debt today in a move aimed at cutting the national debt.
The loans, which were taken out by students who began courses between 1990 and 1998, have been sold to a debt management consortium for £160 million.
Universities Minister David Willetts said the private sector was best placed to collect the outstanding debt, allowing the Student Loans Company (SLC) to concentrate on administering newer loans.
Of the 250,000 loans sold, around 46% are earning below the repayment threshold, 14% of borrowers are still repaying and 40% are not repaying their loans in accordance with their terms.
The project to find a buyer for the remaining mortgage-style loans was launched earlier this year, when Mr Willetts said the plan would “maximise the value of one of the Government’s assets”.
The mortgage-style loans have a face value of around £890 million but the market value is significantly lower.