Student Loans to be Sold Off

Education secretary David Blunkett has launched the Labour Government's first privatisation with a Bill to sell off debt from student loans.

The sell-off was first drawn up by the last Tory Government and Mr Blunkett said it was needed as "a critical element" in meeting Labour's manifesto pledge to work within spending plans already announced for the next two years.

The Bill smooths the path for the sale, which is expected to raise around £3bn.

Mr Blunkett said: "It puts on a clearer footing my power to make subsidy payments to buyers and provides safeguards for the buyers and the taxpayer.

"Given the support of the Opposition for this measure I expect the House of Commons to see it as non-controversial."

The sale of student loan debt was announced by the previous Government in September 1996. The Bill will not change the terms for existing student loans but hands over the job of collecting debts to the sell-off buyers.