The loans, which were taken out by around a quarter of a million students between 1990 and 1998, have been sold to debt recovery company Erudio Student Loans for £160 million.
The move has sparked widespread concern across the country and Oxford students have been amongst those voicing their opposition.
James Elliott, who was elected an NUS delegate last week and is organising protests against the sale, commented, “The privatisation plan is simply outrageous. The only way that a private company will be able to profit from the loans will be to raise the interest rates, effectively making students pay a higher price for our education.
“This is exactly what happened to students in New Zealand a year ago. It does not even make economic sense in the rhetoric about ‘everyone bearing the brunt of austerity’. As the author Andrew McGettigan has said, these loans being privatised can only lose the government money in the long run.”
Olivia Arigho Stiles pointed out, “It effectively means the government will be imposing a retrospective hike in tuition fees, further eroding the access and attractiveness of higher education to less advantaged students”
David Willets, Universities and Science Minister, tried to dispel some of these worries in a statement released on Monday, “The sale will allow the Student Loans Company to focus on supplying loans to current students and collecting repayments on newer loans. Borrowers will remain protected and there will be no change to their terms and conditions, including the calculation of interest rates for loans.”
He also stressed the financial reasoning behind the government’s decision, commenting, “The sale of the remaining mortgage-style student loan book represents good value for money, helping to reduce public sector net debt by £160m. The private sector is well placed to maximise returns from the book which has a deteriorating value.”
However, this appears to have done little to allay student fears. A petition on the Government’s ‘e-petition’ website has been circulating around Oxford students, currently with around 16,000 signatures from people across the nation.
One student putting their name to the protest, Tom Haswell, from Exeter College, commented, “I don’t fully understand the fine details of the economics of this move, but what those who sign the petition are attempting to achieve is the sale’s debate in parliament, rather than sitting back and allowing it to happen. I, and many others, see this sale as short-sighted – given that student loans are a long-term investment.”
However, second year PPEist Rowan Lennox said, “Given that the government has not changed the conditions of the loans it is privatising and has guaranteed that interest rates will not rise, by selling them off it is able to reduce public debt without cost to the taxpayer.”
After last Wednesday’s demonstrations outside the Clarendon Centre, further protests have been planned for Tuesday.
