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Sell in haste, repent at leisure

The government should resist the temptation to make any future quick sales of student debt, says Nick Petford.

The government appears committed to selling as much of the student loan book as it can. Its announcement today that it has sold to a private consortium the remaining £890 million-worth of mortgage-style loans taken out by students between 1990 and 1998 is likely to be only the beginning. In June Danny Alexander, chief secretary to the Treasury, announced that, by 2020, the government intends to raise £15 billion through the sale of public assets, including the student loan book, which was valued at £28 billion in March 2012 and is set to rise further due to higher tuition fees. Some estimates now put it at £40 billion.

So far, plans to sell more of the loan book have been stayed by market conditions, meaning the price is not yet right. But of course this can change. In anticipation, the National Audit Office has been asked to scrutinise arrangements made to date by the Department for Business, Innovation and Skills and the Student Loans Company, and also to assess how effective the department has been at collecting repayments due on student loans made since 1990-91. It will publish its findings on Thursday.

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