Skip to comments.Raise interest rates on old student loans, secret report proposes (UK)
Posted on 06/18/2013 5:53:29 PM PDT by Lorianne
Proposal is found in Whitehall-commissioned study examining how coalition could privatise entire stock of student loans ___ A confidential report commissioned by the government has proposed redrawing the terms of student loans taken out over the past 15 years, that would make them more expensive to pay back for 3.6 million borrowers in England alone.
The proposal to increase the interest rates on the £40bn worth of loans is the most controversial of a series of options contained in a Whitehall-commissioned study examining how the coalition could privatise the entire stock of student loans issued since 1998.
Increasing the amount that students would be forced to pay back would make the loans more attractive to buyers.
The document, prepared by Rothschild investment bank, was submitted to the business department in November 2011, but is understood to still be under active review. It has never been made public, or been seen by higher education professionals.
Any move to increase the interest rates on loans already taken out could add extra years of repayments even for those who left university long ago.
In the report, dubbed Project Hero, the authors suggest a script for ministers to persuade graduates to accept the worsening of their conditions. "We all live in difficult times," they suggest ministers argue. "You have a deal which is so much better than your younger siblings (they will incur up to £9,000 tuition fees and up to RPI+3% interest rates)".
A statement from the Department for Business, Innovation and Skills confirmed that ministers were still looking at how to privatise the pre-2012 student loan book. It noted: "The government has not made any changes to the pre-2012 loans interest rate terms
Work on the feasibility of selling the pre-2012 student loan book is ongoing."
(Excerpt) Read more at guardian.co.uk ...
changing legal contracts ex post facto? don’t think so.
Interesting that the UK wants to privatize the loans while our idiot politicians nationalized them here.
Yeah, that’s not gonna fly. It would pretty much guarantee default I’d think.
We’ll see if they get away with it.