The immoral sale of student loans

1 Dec 2013

£9,000- the rip-off price for education that students currently have to pay. However, it’s one thing making current students pay, it’s another to make past students who have paid almost all of their student loan back pay. A few days ago, the Coalition government sold £890m of student loans to private debt collectors for the sum of £160m. Measly, compared to the amount that is owed or left to pay. To me, that’s a bad deal, to say the least. I accept that the Coalition has to deal with their own debt problems, handed to them by the last government, but it’s almost immoral to do what the government has done. 

 

Erudio Student Loans has been sold a chunk of student loans to collect, dating from 1990 to 1998. The government may be struggling, but that doesn’t mean that private companies should be able to profit from the pockets of the people, and certainly not those who may struggle to pay the debt back. I expect that many of those who took out these loans are now in sustainable employment, but with energy bills being raised and everyday living costs getting higher, is this the best thing to do to people who may be struggling as it is?

The other point that I would make is that many of these former students have paid back into the system over the last 15 years, meaning that their education, the one they now have to pay for, is essentially helping the government make money and some people earn a living. Don’t you think that they pay enough already. Aside from the moral issue, it may sound not too bad, but in the hard times that some families are living in at the moment, we don’t want to be piling more pressure on top of what they already have. 

Under international law, education is a right. It shouldn’t be treated as something that will bother you for the rest of your life. The deal was that you only pay a certain amount off and after so many years, it is written off. Simple? It seems not. Despite this, it is good to see that the national body, that represents students at college and university, has managed to talk at least a bit of sense into the government. The good news is that the terms of such loans have not changed, meaning that really, graduates will just be paying at exactly the same rate as before. As much as I’m not on the side of the government on this issue, I do think that this is good.

There is, at least for now, some hope that we will see it all work out. Somehow, I doubt it though. I have to agree with the President of the NUS on this one. It’s simply immoral to let private companies benefit from public debt that many graduates may not be able to pay back. When the government set out to reduce the deficit three years ago, I don’t remember this being part of the deal. 

Overall, I think that despite the fact that some may be able to pay the loans back, others may struggle and that is simply immoral in my view. For me, it’s not a question of how many people can afford to pay it back- that will sort itself out over time- the real issue is the burden that the government is placing on people who may be struggling here and now, which in our current society is far too many.

Backbench Minister for Education

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