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Economic Affairs Committee Chairman presses government again for answers on student loans system

The Chairman of the House of Lords Economic Affairs Committee has written again to the Universities Minister for further clarification on the Government's student loans policy.

In his letter to the Universities Minister Jo Johnson MP, Committee Chairman Lord Hollick asked:

  • Does the Government still intend to sell the pre-2012 student loan book and is it confident a buyer can be found?
  • Should the decision to freeze the student repayment threshold be revisited?

On 5 July 2016 the Economic Affairs Committee heard from experts and officials on the current student loans system. Following the session Lord Hollick wrote to the Minister raising concerns about:

  • The Government plans to sell student loans taken out before 2012;
  • whether the decision to freeze the student loan repayment threshold was in accordance with the terms and conditions of existing student loans;
  • monitoring of higher education providers; and
  • plans to move to a digital repayments system.

The Minister responded in detail on 7 October 2016.

Lord Hollick, said:
“The Minister's answers on how alternative providers of higher education will be monitored and the linking of higher education and tax data to assess the graduate premium are welcome.

"However, his letter failed to address concerns about the student loan book sale and retrospective changes to loan terms and conditions.
“Questions remain however about the Government's plans to sell the pre-2012 student loan book. In particular whether any buyer would be willing to purchase the loans on the terms proposed by the Government.

“We also question whether the Government should reconsider its approach to freezing the repayment threshold. During the evidence session officials accepted that the freezing of the repayment threshold was a retrospective change.”

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