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Further student debt sales: would Scottish students be in or out?

March 23, 2015

Andrew McGettigan has flagged up that the sale of student debt from before 2012 has not yet  gone away as an issue in Whitehall: see here.  Though reportedly stopped by Vince Cable, it remains formal Treasury policy and proceeds are built into estimates from 2015-20.

That begs the question whether the Scottish Government has taken a formal view on whether any sale would include Scottish students or not: under existing rules,  to the best of my understanding, this ought to be the Scottish government’s call.  The last sale of student debt (the last group of students under the old mortgage-style rules) took place in autumn 2013 and did include Scottish borrowers (footnote 3 here).

McGettigan argues in the London Review of Books that the only benefit of any sale of further loan debt would be immediate cashflow, not long term net public profit.  Still, any injection of cash might be as welcome to the Scottish government as to their opposite numbers in Whitehall.

The previous Cabinet Secretary for Education was very strong on how Scotland was resisting the “marketisation” of higher education.  Selling off student debt to the private sector is about as marketised as it gets, so one might assume it would be off the agenda here.  But given the last sale went through largely unnoticed in Scotland just as the government’s anti-marketisation rhetoric was cranking up,  assumptions may not be helpful.  I haven’t yet found any Scottish ministerial comment on Whitehall’s proposed sale, although it has been coming on and off the agenda since December 2013.

It would be interesting to know if the Scottish government has a principled position here or, as before, is intending to go with the flow and (presumably) take its share of the upfront profit.  Many commentators continue to be sceptical that a further debt sale will happen. But with the acute immediate pressure on public finances, it remains a possibility and one which, for now at least, appears possibly relevant to Scottish graduates too.

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