Daniel Zeichner MP has called on the Government to rule out privatising the Student Loan Book after rumours emerged following the Chancellor’s speech to the Confederation of British Industry (CBI) that the Government is strongly considering the privatisation of pre 2012 ICR student loans as part of their planned sale of national assets.

The Labour MP is also seeking a guarantee that there will be no change in the terms and conditions of existing student loans without a vote in parliament.

A report from the Department for Business Innovation and Skills found it to be “clear that the private sector can see a profit in collecting student loan debts that the government cannot”, but Mr Zeichner is concerned that any transfer to a profit-seeking private sector buyer will involve an increase in interest rates or a restructuring of the repayments scheme which will make the loans system unaffordable for ordinary students of all backgrounds.

Mr Zeichner said: “Given that current undergraduates will face an average debt of nearly £40,000, I would hope the Chancellor agrees with me that students have paid enough for their education and that, rather than making the punitive move of transferring student debt into private hands, we should be supporting and investing in young people seeking a high-quality education in order to build a brighter future for themselves and our country.”