Introduction
Government’s student loan portfolio is growing rapidly. The total outstanding face value of English loans—considering accrued interest, cancellations and repayments already made—rose from £89 billion in March 2017 to £102 billion in March 2018. The Department expects it to reach £473 billion by March 2049. Government expects only 55–60% of the value of the loans to be repaid: some borrowers will not reach the threshold level of income for repayment and others will not have repaid the loan by the time it matures. The Treasury is concerned about the growth in the loan book and the resulting exposure of public finances to the risks within the portfolio. As government has a wider policy not to hold assets unless there is a policy reason for continued public ownership, in 2013 it announced a programme to sell-off a portion of its student loan book and to raise about £12 billion by 2022. In December 2017 the Government completed its first sale of loans to private investors, achieving £1.7 billion from 1.2 million loans held by over 410,000 borrowers. HM Revenue & Customs and the Student Loans Company, alongside UKGI, will continue to administer the loans and collect repayments leaving the borrowers unaffected by the sale. On 10 October 2018, the Government announced the second sale under the programme.
Published: 22 November 2018