Student Loans to be Privatised

Student Loans to be Privatised



Earlier this month in the annual Autumn Statement, Chancellor George Osbourne announced that the cap on student numbers will be lifted, allowing England’s universities to admit up to 30,000 additional students.

Set to commence next year, the intention of the move is to enable more students with potential to attend university, rather than many being held back by grade restrictions.

At present, English universities are at liberty to enrol as many top-performing applicants as they wish, but if they accept more applicants than the quota, they are fined.

Chief executive of Universities UK, Nicola Dandridge, believes that “more graduates is good for the economy, developing a strong society and improving the lives of individuals.”

The initiative is only liable due to the Tories’ decision to privatise the student loans. Osbourne revealed that “the new loans will be financed by selling the student loan book”, which, if completed, will result in a deliverance of approximately £10-15 billion to the Government over a five-year period.

The NUS president for higher education, Rachel Wenstone, said “using the sale of public assets to fund this project is a short-term fix because the current student loans system is completely unsustainable and this selling of public assets is stacking up problems for the next generation.”

The new student loans of up to £9,000 loans will not be affected, as only the loans taken out between 1998-2012 have the potential of being sold over the next five years.

Despite rumours, the Department of Business, Innovation and Skills have reassured that interest rates will not be affected, and neither will borrower’s terms and conditions.

The Russell Group, a body representing some of the UK’s leading universities, argued that with the uncapped admittance of students, quality might not be maintained in universities.

A representative went on to state that “providing higher education for everyone who wants it will require substantial long-term contributions from public funding and will present challenges for any future government that is unwilling or unable to continue to fund this.”


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