MSE News: Government sells £900m of 1990s student loans

Universities Minister David Willetts says: "The sale of the remaining mortgage-style student loan book represents good value for money, helping to reduce public sector net debt by £160 million."

Oh but what about the worrying effect that 2012-on repayment plan 2 high limit high interest rate Student Loans are now having on average unsecured household debt figures also released today? How soon will it be, Minister, before the UK household debt pattern reflects the USA experience where Student Debt exceeds Credit Card Debt?

"The private sector is well-placed to maximise returns from the book, ..."

Right and what do you mean by that, Minister?

" ... which has a deteriorating value."

... and by that you mean that the outstanding loan balances are reducing so if you leave it any longer then there will soon be no saleable opportunities remaining to tempt private sector types to snap up the debt and use their private sector tactics to "maximise returns" ?

"The sale will allow the Student Loans Company to focus on supplying loans to current students and collecting repayments on newer loans.

At rip off rates that bear no relationship to current mortgage rates, you mean, Minister, so that future tranches of Student Debt can be more easily and more rapidly sold off than any before them?

"Borrowers will remain protected and there will be no change to their terms and conditions, including the calculation of interest rates for loans."

What borrowers? Do you mean borrowers from the 1990s or SLC borrowers generally? What protection?

While the mortgage-style loans have a face value of around £890 million, their market value is significantly lower.

Ah, so you are front-loading the sale to privateers by heavy discounts. No wonder they are well placed to maximise returns, Minister. You are well placing them :mad:

Of the 250,000 loans sold, around 46% are earning below the repayment threshold, 14% of borrowers are still repaying and 40% are not repaying their loans in accordance with their terms.

What mealy-mouthed use of English is this? Of which 250,000 loans sold over what period? Is this the 1990s loans again? What repayment threshold is being referred to? Who are the 40% not repaying their loans in accordance with their terms? Are you saying you are setting the dogs loose on 40% of the book, Minister, and that another 46% are not even worth setting any dogs loose on because despite a university education they are relative paupers?

Does this paragraph in fact mean that 86% of 1990s university students are incapable of or are deliberately avoiding repayment of student loans? Tell us more about this please.

No debt collector will ever call I suppose.

40% [representing 100,000 of the most highly educated people in this land] are not repaying their loans in accordance with their terms.

With a record like that, this government almost makes Paul Flowers look competent.

I suppose, however, Erudio Student Loans have plans to improve that figure, as 14% [number of borrowers who are still repaying] of £890m falls somewhat short of the £160m paid (and that's before recovery costs are taken into account).

Did Vince Cable order a baseball bat count at Erudio Student Loans before these loans were sold on to them?