Ex- Universities Minister David Willetts proposes that graduate debt be sold to universities

Posted on
David Willetts, ex-minister for universities  and science (replaced in the recent reshuffle by Greg Clark), has proposed that universities be given the option to purchase their students' debts.

Currently students pay back their student loans to the Student Loans Company once they are earning over £21,000. Mr Willetts stated that it could act as an incentive for universities to assist their students to secure good jobs on graduation and hence secure the earlier repayment of loans.

Concern has been expressed that a change of this nature may discourage universities to offer courses that do not traditionally lead to higher paid employment, and may result in universities seeking to admit only those students perceived as having the greatest earning capacity. There has also been a suggestion that it could result in raising the £9,000 annual cap on university fees.

Mr Willetts stated that he had considered the proposal whilst still in office, but had concluded that it was not currently deliverable with the existing government IT systems, although it should be in a few years.

Read more here.