Investment bankers from Barclays and Rothschild were appointed by the Department for Business, Innovation and Skills (BIS) last month to oversee the sale, which more than 15,000 people have signed an online petition to oppose. Danny Alexander, the chief secretary to the Treasury, said during the summer that the Government hoped to raise 10bn from the sale of corporate and financial assets such as the student loan book by 2020. David Willetts said the sale would help balance the nation’s books Speaking in March, when the mortgage-style student loan auction was initiated, David Willetts, the universities and science minister, 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 (SLC) to concentrate on providing loans to current students.” The low recovery rate on the 1990s loans means the sale price is likely to be only in the tens of millions of pounds, reflecting the distressed nature of the debts, people close to the situation said on Sunday. The deal will come at a sensitive time, just weeks after Royal Mail was floated with a valuation of 3.3bn.
“$167,000,” Sam said. The Striblings pay about $800 a month toward their debt, which adds up to almost $10,000 a year, and with a 6 percent interest rate, that $167,000 debt is not shrinking. “The loans get bigger every year,” Sam said. And the Striblings’ story is far from unusual. “It is just a mess,” Jay Slivocka said. Slivocka graduated from University of North Texas.
According to Chopra, student borrowers problems today are astoundingly similar to mortgage borrowers the job they expected either never appeared or went away. NO ESCAPE If student loans do become the next big bust, it would not play out like the foreclosure mess. To the most part, homeowners could give up the house and escape the debt. Theres no escape from student debt it usually cant be erased in bankruptcy. The federal government is a mean collector.
This summer, Congress passed a law tying interest rates on loans to the market. The law set rates for all the loans at different levels, but based them all on the 10-year U.S. Treasury rate and allowed rates to change each year. For Stafford loans, both the subsidized and unsubsidized, the interest rate is sites the Treasury rate plus 2.05%, with a cap of 8.25%. Graduate student loan rates are the Treasury rate plus 3.6%, with a cap of 9.5%, and the parent loans are the Treasury rate, plus 4.6%, with a cap of 10.5%.
Government sells £900 million in student loans to debt collection company
Effectively subsidizing half of the agency’s total operations, the profits have enabled Sec. Duncan to reduce the Education Departments total cost to the smallest amount since 2001. The Education Department spent $40.9 billion in 2013, nearly a third less than 2012 and the lowest reported amount since the first year of George W. Bushs presidency, according to the Treasury Department. Student loan profits last year exceeded the amount of money for federal Pell Grants given to low-income college students, according to budget documents.
Selling Off the Loan Book Would Be the Government’s Most Outrageous Attack on Students, So Why Aren’t the NUS More Concerned? A company called Erudio Student Loans was named as the successful bidder on Monday, and now owns the remaining 17% of mortgage style student loans taken out by those who began courses between the eight year period. Universities and Science Minister David Willetts said the price paid exceeds the estimated value of the remaining student loans, and added the private sector is “best placed” to collect the remaining debts. The sale of the remaining mortgage style student loan book represents good value for money, helping to reduce public sector net debt by 160m,” he said. “The private sector is well placed to maximise returns from the book which has a deteriorating value.
I would like to receive additional offers and information from The Independent I would like to receive additional offers and information sent by The Independent on behalf of carefully selected partners Terms and Conditions * I have read, understood and agree to be bound by the terms and conditions of Independent Digital News and Media Limited Registration Government sells 900 million in student loans to debt collection company Sale made as part of an effort to improve the nation’s finances Simon Read Simon Read Simon Read is Personal Finance Editor at The Independent. He edits the Saturday Your Money section as well as writing for the news and business pages of the Independent and i newspaper. Your friend’s email address Your email address Note: We do not store your email address(es) but your IP address will be logged to prevent abuse of this feature. Please read our Legal Terms & Policies Email Some 300,000 former students could soon face a barrage of fresh debt demands after the Government announced it was flogging student loans worth 890m to a private company, renowned for its persistent debt recovery practices. Erudio Student Loans has agreed to pay 160m for the loans, taken out by students between 1990 and 1998.