Sale of Student Loans
Sale of Student Loans
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Sale of Student Loans
The UK Government announced on 6th February that it is starting the process required to sell part of the English student loan book. It covers loans issued by any English local authority which entered repayment between 2002 and 2006. The sale is being undertaken in accordance with the Sale of Student Loans Act 2008.
The announcement made on the 6th February is available at www.gov.uk/ and the following information should help address any questions you have regarding your loan.
One important thing you should be aware of is that the UK Government has made it clear that there will be no impact on customers whose loans have been sold as a result of the sale.
You do not need to take any action as a result of the sale. If your loan is sold, Student Loans Company will still be responsible for administering your loan(s). This means the way you repay will stay the same and you will still receive your annual statements from us.
Although the loans will be transferred to an independent investment company:
The sale includes loans issued by any English local authority which entered repayment between 2002 and 2006. The sale is being undertaken in accordance with the Sale of Student Loans Act 2008. This process will take several months. If your loan is part of the sale, then, following its completion, the Student Loans Company (SLC) will write to you on behalf of the Secretary of State for the Department for Education to inform you that your loan(s) is (are) among those that have been sold. No response or action to the letter will be needed. The majority of customers with a student loan will not be included.
The sale of the loans is part of a wider UK Government drive to reduce fiscal pressures and allow investment in other policies with greater economic or social returns while ensuring value for money for the taxpayer.
Are Government allowed to do this?
The Sale of Student Loans Act 2008 permits the sale of student loans but requires that sold and unsold loans are treated in the same way.
Who will these loans be sold to?
The UK Government and the Department for Education have advised that the loans will be sold to a new independent English company whose sole purpose will be to own the loans on behalf of investors. The details of this company will be confirmed once the sale process has been completed.
How will customers be advised if their loans have been sold?
On behalf of the Secretary of State for the Department for Education, SLC will write to all customers, at their registered address, advising if their loans are included in the sale. Letters will be issued within three months of the sale concluding. If you do not receive a letter within that period, your loan is not one of those that have been sold.
What is an Income Contingent Repayment Loan?
Income Contingent Repayment (ICR) loans are the type of student loans which were made available from 1998 onwards to higher education students. These loans are repaid based on income, normally via deductions from a customer’s salary if employed or through Self Assessment tax return if self-employed.
Will the terms and conditions of these loans change?
The terms and conditions will not change as a result of the sale and SLC will continue to administer the loans.
Will the interest rate change?
No, the interest rate will not change as a result of the sale. The interest rate is currently set by the Department for Education, the Government department responsible for student loans. The interest rate is updated once a year on 1st September, using the Retail Price Index (RPI) figure from March of that year. This process will remain the same for sold and unsold loans after the sale. See Interest rates for more information.
How can I find out the balance of my account?
Log in to your account at www.studentloanrepayment.co.uk
To log in you will need your Customer Reference Number, password and secret answer.
Can the loan balance be paid off immediately?
Yes. Customers can call SLC on 0300 100 0611 (Mon - Fri 8am - 8pm and Sat 9am - 4pm).
If a customer has been making repayments through their salary they need to make sure that when they call they have their:
Can additional amounts still be paid online towards an outstanding balance?
Yes, additional payments by credit or debit card can be made at any time by using the Make a Payment service.
Will my Employer have to take any action?
No. Employers will continue with PAYE, as instructed by HMRC.