The U.K. government is seeking a private-sector buyer for the remainder of its mortgage-style student-loan book with a face value of about 900 million pounds ($1.35 billion).
The loans, which are mostly in deferment or in arrears, were issued between 1990 and 1998 and are repayable in installments when the borrowers are earning more than 85 percent of the average, currently giving a threshold of 27,813 pounds, Business Secretary Vince Cable said in a statement in London today.
“The loans to be offered for sale have a face value of around 900 million pounds but, due to the low level of repayments in relation to the loan book, the market value will likely be significantly lower,” Cable said. “The government recognizes that the private sector may improve the collection of repayments using their expertise.”
The loan book will only be sold if a deal is considered to give value for money to taxpayers and legal protection for borrowers is assured, Cable said. There were two previous sales of such loans in 1998 and 1999.