Question to the Department for Education:

To ask the Secretary of State for Education, further to his written ministerial statement HCWS1137 Government Asset Sale Update, published 4th December 2018, what assessment his Department has made of the total loss in future receipts in repayments from the student loans that were sold for £1.9 billion.

​​Through the sale, the government has exchanged a stream of uncertain future cash flows spread over thirty years for a certain lump sum now. When assessing whether or not to sell the loans, the government therefore has to determine today’s value of those future cash flows to be able to compare it against the price being offered by the market. To make this assessment, the government forecasts the repayments and then takes into account: the time value of money, the effect of inflation, the riskiness of the asset, and the opportunity cost of having money tied up in that asset that could otherwise be used for purposes or policies with greater social or economic returns. This follows the guidance set out in Her Majesty’s Treasury’s (HM Treasury) Green Book:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/191488/Green_book_supplementary_guidance_asset_valuation.pdf.

​In accordance with this assessment, the government has concluded that the sale achieved value for money in accordance with HM Treasury’s Green Book guidance.