Talks held on universities buying loans co.

January 17, 1997

THE COMMITTEE of Vice Chancellors and Principals is investigating the feasibility of the universities buying the Student Loans Company.

The CVCP's director of policy development, Tony Bruce, will be holding discussions with the company and the Department for Education and Employment over the next three weeks with a view to producing an options paper on loans for the CVCP next month.

The CVCP executive has charged Mr Bruce with exploring an idea put forward by Iain Crawford, a member of the centre for educational research at the London School of Economics. Mr Crawford and fellow CER member Nicholas Barr produced a submission on loans to the Dearing Committee.

Barr and Crawford's proposals maintain that the universities are the most appropriate owners of the SLC because it is in their best interests to strike a balance between the needs of students and commericial requirements of a loans system. They warn that selling the SLC to the private sector could lead to unfavourable terms for student borrowers.

The Barr and Crawford argument is that universities would seek to secure the best deal for students who are their main source of income while ensuring the repayment mechanism is sufficiently credible and efficient to attract the highest price in private sector.

Mr Bruce said: "We want to test this idea out to see if there is any mileage in it. Barr and Crawford make a valid point about the dangers of loans being captured by an unfriendly lender or commercial operator."

Dr Barr said: "If the CVCP registers interest it will be very difficult for the Government to ride roughshod over this idea." The Government is also trying to sell the debt to the private sector by early next year.

The National Union of Students opposes the selling off of the SLC.

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