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Student Loans – sale of ‘mortgage-style loan book’

March 27, 2013

This morning, the government has announced that it will proceed with the planned sale of what remains of the outstanding student loans issued between 1990 and 1998.

The remaining balances on these loans come to about £750million and effectively represents the disposal of ‘bad debt’ given the age and terms on these loans. Two previous sales occurred in 1998 and 1999.

Outstanding balances on the ‘income contingent repayment’ loans issued subsequently are now somewhere north of £40 billion. Although the 2011 white paper sought a sale here, no such deal is yet forthcoming. You can read more about the attempts to sell or securitise these loans in the final part of my new book.

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