Education: Student Loans

Lord Naseby Excerpts

Monday 3rd June 2013 Lords Chamber

Asked by

[Lord Naseby]

To ask Her Majesty’s Government whether they have any proposals to privatise or reorganise the handling and repayment of student loans.

[Baroness Garden of Frognal]

My Lords, the Government continue to explore options for monetising student loans and launched a sale of the remaining mortgage-style student loans in March. Any future sale of income-contingent repayment student loans would take place only if it reduced the Government’s risk exposure to the loan book, represented value for money for the taxpayer and ensured protection of borrowers.

[Lord Naseby]

My Lords, is my noble friend aware that the selling-off of the earlier mortgage book is greatly welcomed? However, the current loan book now stands at close to an estimated £40 million and no fewer than 22% of students from overseas are either not paying or have disappeared, and that involves a figure of no less than £50 million. What are the Government doing about this failure to repay by students who have taken loans, not least because if no further action is taken, that figure of £50 million will rise well into the hundreds of millions due to the recent increase in student loans?