Student Loan Books

Baroness Garden of Frognal Excerpts

Thursday 11th October 2018 Lords Chamber

[Viscount Younger of Leckie]

I thank the noble Lord for his questions. The detail in the WMS that we issued yesterday was pretty comprehensive, but perhaps I can help the noble Lord by adding a few things.

Yesterday, we announced the start of the process for the second of these sales. It relates to the selection of loans that became eligible for repayment between 2007 and 2009. They have a face value of £3.9 billion but, for commercial reasons, we cannot disclose what the Government think the retention value is, particularly as we are pursuing this programme of sales. I am sure that the noble Lord will understand. He will know that the Government received cash proceeds of £1.7 billion from the first sale of the student loans and the reduction in the PSND.

Another question the noble Lord raised concerned the proceeds that will be received by the Treasury. Yes, they go to the Treasury and it is up to the Treasury to decide how to spend them. I cannot confirm whether those funds will go to the DfE.

[Baroness Garden of Frognal (LD)]

My Lords, unlike any other loan available in the UK, repayments for a student loan are paid through PAYE and are dependent on how much somebody earns. Given the multiple problems with student loans, as outlined so admirably in the report by the noble Lord, Lord Forsyth, can the Minister say what consideration the Government are giving to reforming student loans into a graduate tax?

[Viscount Younger of Leckie]

The issue of a graduate tax may or may not be included as part of the post-18 review. What we have made clear is that a matter of taxation, or something related to taxation, should not be included in that. On the question concerning the Student Loans Company, the noble Baroness will know that a new permanent appointment has been made to that company and that matters have been taken forward to ensure that it continues to work as well as it can. It is ongoing work.