Press release

Government to sell off mortgage-style student loan book

The government launches process to sell off the last remaining publicly-owned mortgage-style student loans

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


The government is launching a process to sell off the last remaining publicly-owned mortgage-style student loans, the Minister for Universities and Science David Willetts announced today.

The sale only includes mortgage-style loans that were available to those enrolled at university between 1990 and 1998 and not Income Contingent Repayment (lCR) loans such as those currently offered to students. No current students or borrowers who solely took out an ICR loan after September 1998 will be affected.

This is part of a continuing government wide programme of maximising the value of assets in the interests of the taxpayer.

Universities and Science Minister David Willetts said:

Selling the remaining mortgage-style student loans will allow us to reduce public debt and maximise the value of one of the government’s assets.

The private sector’s expertise makes it well placed to collect this debt and the sale will also help the Student Loans Company to concentrate on providing loans to current students.

Potential buyers will be evaluated against a strict set of criteria to ensure taxpayers get value for money and there are adequate borrower protections in place. The terms and conditions for borrowers who took out mortgage style loans will not change as a result of the sale.

Notes to editors:

1.The loan book will be offered for sale by the government under the Education (Student Loans) Act 1990 as amended by the Education (Student Loans) Act 1998. The sale will take place in conjunction with the Scottish Government, the Department for Employment and Learning in Northern Ireland and the Student Loans Company.

2.Mortgage-style loans were available to eligible students enrolled in higher education between 1990 and 1998. There will be no change to borrowers’ terms and conditions as a result of the sale. Borrowers are required to repay in fixed monthly instalments over a defined period, typically five or seven years. Interest is charged at a rate equivalent to the Retail Prices Index. Repayments can be deferred for a year at a time if a borrower’s income is below the threshold, which is 85 per cent of the national average earnings. Currently the threshold is £27,813.

3.There were two previous sales of mortgage-style loans in 1998 and 1999. The remaining loans owned by the government are mostly either in deferment or in arrears, so total annual repayments are low. The loans to be offered for sale have a face value of around £900 million but, the market value will likely be significantly lower.

4.More details of the sale will be published by the Department for Business, Innovation and Skills in due course.

5.PricewaterhouseCoopers (PwC) have been appointed as advisers to the government. Parties interested in purchasing the loan book should contact PwC at by the 3 April to receive further details.

6.The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:

  • to create the most competitive tax system in the G20
  • to make the UK the best place in Europe to start, finance and grow a business
  • to encourage investment and exports as a route to a more balanced economy
  • to create a more educated workforce that is the most flexible in Europe.

Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.

Published 26 March 2013