Student loans – proposals to effect a sale to third parties

It’s been a busy few days in the world of student loans.

Here’s a story I helped False Economy and  the Guardian break last night – 100 000 hits so far. The Government’s ‘state of the art’ advice on selling loans, codenamed ‘Project Hero’, recommended changing the interest rates for existing borrowers in order to boost price and volume of sales.

Alternatively, the government could replicate such a change  through providing purchasers with guarantees against particular combinations of RPI and bank base rates. This is termed a ‘synthetic hedge’. This would see public money shoring up a sale instead of repayments made by individuals.

See what you think:

News story here

Longer comment from me here on the False Economy site