The privatisation of more than £900 million of student loans has been confirmed by the Government this week, in spite of significant student protest and opposition.
The loans will be offloaded to a private debt collection agency in an attempt to, “allow [the Government] to reduce public debt and maximise the value of one of the Government’s assets,” announced Universities Minister, David Willets.
“The private sector’s expertise makes it well placed to collect the debt”.
This set of loans, taken out between 1990 and 1998, will be sold at a rate far below their perceived market value. The sale price is likely to be less than £100 million.
However Willetts has assured students: “The private sector’s expertise makes it well placed to collect the debt and this will also help the Student Loans Company to concentrate on providing loans to current students”.
“The ‘student sell-off’ is a worrying eventuality”.
The decision ignores the National Day of Action, instigated by the Student Assembly against Austerity, which was held on 20th November 2013 in opposition to the privatisation of student loans and involved 25 universities, including UoN.
Responding to the news of the sale, the University of Nottingham (UoN) Students’ Union’s Environment and Social Justice Officer, Michael Abiodun Olatokun, told Impact:
“The ‘student sell-off’ is a worrying eventuality, as exposure to private interest rates will bind many of those affected to their university loans for life. Groups within the Student Ethical and Environmental Network have been very active in campaigning on this issue, and they have my full support.”
“The Government are hammering students at every opportunity”.
One UoN student commented that this attempted privatisation reinforced the notion that, “the Government are hammering students at every opportunity”.
However, Gianni De Fraja, a Professor of Economics at UoN, suggested that private ownership of student loans may not necessarily be negative.
“Ex-students who earn below the threshold (£28,775) are not affected by the sale.”
“The public sector have no expertise in debt collection, and therefore the collection process is likely to be more efficient if carried out by companies with experience.
Ex-students who earn below the threshold (£28,775) are not affected by the sale.”
In terms of the response from the wider university community over the privatisation, members of ‘Sussex Against Privatization’ and ‘Defend Education Birmingham’ went into occupation. Both groups cited the sale of the student loan book as one of the reasons for direct action.
“New student loan uptake has been higher, and graduate salaries are not growing as predicted”.
Posting on their blog, Sussex activists stated: “Privatising the student loan book will have heavy repercussions for former, and current, university students. New student loan uptake has been higher, and graduate salaries are not growing as predicted.
“The decision to further introduce market forces into higher education is a short-term fix to the UK’s economic crisis, and indicative of the contempt the Coalition have for students.”
The Student Assembly against Austerity has called for a Week of Action against the “sell-off” by the Government.
The occupation at the University of Birmingham has since been broken up, but those involved have reaffirmed their opposition to student loan privatisation.
The Student Assembly against Austerity has called for a Week of Action in February 2014, to help “build a movement” against the “sell-off” by the Government.
For more information on the UoN National Day of Action on 20th November 2013, click here.