What We All Fear - Changes to T & Cs of Student Loans - A Reality?

setmefree2

The biggest worry and fear for many about government student loans is that the T & Cs are not set in stone. This has been a major worry for many MSE posters over the years and one that many have felt that MSE/ ML has never made enough of.

Secret Report

Raise interest rates on old student loans, secret report proposes

Proposal is found in Whitehall-commissioned study examining how coalition could privatise entire stock of student loans

A confidential report commissioned by the government has proposed redrawing the terms of student loans taken out over the past 15 years, that would make them more expensive to pay back for 3.6 million borrowers in England alone.
The proposal to increase the interest rates on the £40bn worth of loans is the most controversial of a series of options contained in a Whitehall-commissioned study examining how the coalition could privatise the entire stock of student loans issued since 1998.

In the report, dubbed Project Hero, the authors suggest a script for ministers to persuade graduates to accept the worsening of their conditions. "We all live in difficult times," they suggest ministers argue.

Project Hero - !!!!!!!

The report was obtained by the False Economy website through a freedom of information request. Although over 90% of it was redacted, the blacking-out was light enough that virtually the entire report can be read. It was analysed for the Guardian by higher education analyst Andrew McGettigan.
"Many people have speculated about the problems associated with selling student loans," said McGettigan, author of The Great University Gamble. "This is the first authoritative confirmation we've had that the main impediment to sale is the interest rate protection in place for existing borrowers. Under these proposals, this government will get cash now but borrowers or future governments pick up the tab."
"The government must immediately rule out this outrageous suggestion," said Liam Burns of the National Union of Students. "Despite pushing them to establish in law that conditions on student loans could not be altered retrospectively the government refused and gave weak assurances that they had no plans to do so. Now we see their own advisers are suggesting that very move."

http://www.guardian.co.uk/money/2013/jun/13/raise-interest-rate-student-loans-secret-report

sharp910sh

I am not worried. I shall not be voting for the tories or the lib dems.

atypical

Thanks, hadn't seen this.

So the government commissioned a study to look at how best to privatise the loan book (right and proper to do I think we'd agree, presumably outsourced because the civil service doesn't have the expertise needed). The study would had to have looked at the option of changing loan terms. It wouldn't be much of a study if they didn't consider it.

It still remains a government decision to chose which action to take. All the reports done is formalised the options, one of which was always going to be changing the loan terms.

Taiko

Indeed, and I happen to know this was on the cards a long time before this report. I recall seeing discussion along those lines back in 2007.

Poolie

There was legislation past in 2008 called Sale of Student Loans Act which allows the government to sell part of the loan book to the private sector as it had done previously with the pre 1998 loans.

The_Jakal

Once again it looks like the private will profit while the public take the losses!

This has been on the cards for ages and has been swept under the rug by the media on the most part.

None of the papers made a huge deal over the possibility of the changing repayment conditions when the new loans system was proposes and not many of them seem to be chirping up about this news either to be honest.

Surely something like this should be prime time/front page news? But then again nobody seems to act until a bill is actually passed...

All I would say is that the gvt. may have a lot more student riots to contend with if they do change the repayment terms!

setmefree2

Danny Alexander confirms: the student loan book will be privatised

http://www.newstatesman.com/economics/2013/06/danny-alexander-confirms-student-loan-book-will-be-privatised

setmefree2

Petition here:-

http://www.change.org/en-GB/petitions/uk-government-don-t-privatise-student-loans-2?utm_campaign=twitter_link&utm_medium=twitter&utm_source=share_petition

"I have set up an online petition against loans privatisation, which you can sign here. Please share it. If you are or know a journalist, do make as much noise as you can. Write to you MP. If we catch this now we have time to make a difference."

http://www.huffingtonpost.co.uk/tim-whitmarsh/student-loans-privatised_b_3524734.html?utm_hp_ref=uk

Masomnia

Didn't Gordon Brown sell a lot of it?

That didn't alter the terms, so presumably this wouldn't necessarily either.

Dunroamin

Masomnia wrote: »

Didn't Gordon Brown sell a lot of it?

That didn't alter the terms, so presumably this wouldn't necessarily either.

I agree. My pre 1998 loan was sold to Honours Student Loans and others were sold to Thesis - t&c remained the same.

adidas

Interesting reading! I just found out about this. Could the T+C be changed of the post-1998 loans? Would this be legal?