Today, I can update on the Government’s sale of part of the pre-2012, commonly known as ‘Plan One’, English student loan book.
The sale included loans issued by English Local Authorities under the previous (pre-2012) system, specifically those that entered repayment between 2002 and 2006.
Throughout the process, Government’s decision on whether to proceed remained subject to market conditions and a final value for money assessment. I can update Parliament that the transaction achieved a value of £1.7bn, exceeding the HMT Green Book valuation.
Ministers will shortly be laying before Parliament a report on the sale in accordance with Section 4 of the Sale of Student Loans Act 2008. This will provide more detail on the sale arrangements and the extent to which they give value according to HM Treasury Green Book rules.
In advance of that, I would like to reiterate the points I have made previously about the impact of the sale on borrowers and on Government policy.
The position of all borrowers, including those whose loans have been sold, will not change as a result of the sale. The sale does not and cannot in any way alter the mechanisms and terms of repayment: sold loans will continue to be serviced by Her Majesty’s Revenue and Customs (HMRC) and the Student Loans Company (SLC) on the same basis as equivalent unsold loans. Purchasers have no right to change any of the current loan arrangements or to contact borrowers directly. Those whose loans have been sold will be notified in writing by the Student Loans Company within 3 months, for information only. No action will be required. Government has no plans to change, or to consider changing, the terms of pre-2012 loans.
This statement has also been made in the House of Lords