21 July 2014 
Matt Sisson, Projects and Membership Manager
The Guardian reported this week that government plans to sell the student loan book appear to have fallen through after Vince Cable announced his intention to scrap them. Speaking to Liberal Democrat activists at a meeting, the Secretary of State for Business, Innovation and Skills said that although “the government was considering the sale of student loans on the basis that it would reduce government debt… recent evidence suggests this will no longer be the case," He then added, that “given there is no longer any public benefit, Nick Clegg and I have agreed not to proceed with the sale”. The apparent U-turn comes just a week after the junior coalition partners also vetoed the privatisation of the Land Registry.
Commentators believe that future HE student numbers could now be under threat as the Chancellor George Osborne had stated that the extra 60,000 places created for 2015/16 would be initially funded through the sale of the student loan book. Toni Pearce of the National Union of Students welcomed the announcement, saying that "Cable needs to make this decision official immediately, and recognise that we will only achieve a sustainable HE funding system if we abandon the discredited regime of sky-high fees and debts altogether", the Guardian reports.
On Tuesday the Commons’ committee on Business, Innovation and Skills cast more doubt on plans for the loan sale. It “accused ministers of having announced the loan sale without having properly assessed the “financial viability” of such a move, which could in fact raise as little as £2bn”, according to the FT. The committee also questioned the wider loans system, saying it had identified “a number of weaknesses in the management of this key financial commitment”, adding that it was “concerned that government is rapidly approaching a tipping point for the financial viability of the student loans system”.
