Exclusive: student loans u-turn

Government changes position on student loans - selling-on only the least risky to the private sector, Channel 4 News can reveal.

The government has changed its position on the sale of student loans - and will now only sell on the least risky to the private sector.

In an echo of Northern Rock, the government appeared today to be planning to nationalise the risk while privatising the gains.

The £6bn sale of student loans is part of the government's efforts to boost public finances.

''We want to engage initially in loans where we can demonstrate a good track record of graduates repaying."
Bill Rammell, higher education minister

When announcing plans in the autumn, higher education minister Bill Rammell promised "a genuine transfer of risk from the public accounts to the private sector".

He has since said: "'We want to engage initially in loans where we can demonstrate a good track record of graduates repaying."

A government education spokesperson insisted they would not be cherry-picking the loans to sell off.

However, Rob Wilson, the shadow higher education minister, told Channel 4 News:

"We will vote against this if we cannot ensure there is full value for money for the tax payer. And the implications of us voting against this would mean that if this bill falls there would be a huge hole in the government's spending review."