Student loan debts will be sold on to private sector companies in order to raise revenues for education, it has been announced.
Chancellor Gordon Brown unveiled the measure in the Budget, which was announced on Wednesday.
Earlier in the week, the Times had speculated that the Budget would contain such a measure, with Nationwide and Royal Bank of Scotland identified as frontrunners for any potential purchases.
The news was met with concern by student and higher education bodies, worried that interest rates on repayments will go up.
Gemma Tumelty, president of the National Union of Students (NUS), told the Guardian her organisation was “concerned” that the step would “conceal a long-term loss on the repaid debts”.
She added that the NUS would “strongly resist” any attempt to impose commercial rates of interest on student loans.
Wednesday’s Budget was the eleventh to be deliver by Gordon Brown and possibly his last as Chancellor of the Exchequer.
Interestingly, by long-standing tradition, the only time alcohol is allowed to be consumed in the chamber of the House of Commons is during a Budget speech, although Mr Brown is one of only two chancellors that has not taken advantage of the convention.
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