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Sale of Student Loans Bill

moved Amendment No. 11: 11: Clause 3, page 3, line 20, at end insert— ““( ) Transfer arrangements shall—”” The noble Baroness said: Clause 3 concerns the onward sale of the loans. It gives the purchaser the right to sell loans to another buyer after the initial sale. Of course, we have received some assurances regarding certain limitations on this power, but there still need to be further safeguards. Collateralised debt is the subject of much media attention these days and we all know how often loans are repackaged and sold off to a multitude of other actors. There is no guarantee that we will even know who they are. Indeed, they could be out of the jurisdiction of the Secretary of State, opening up limitless problems concerning control of the debt obligations and the terms and conditions from the students’ point of view. Also, some students could find themselves unprotected by English law. An international student who has returned home faces the possibility that the return on the debt could be demanded at a faster rate. The effects of this provision, as I am sure that the Minister would agree, would be unfair, but how are we expected to control it? Does the Minister not think that there should be mechanisms in place to prevent this? To address this issue, we propose placing a duty on the Secretary of State to satisfy one of two conditions—that the arrangements include a prohibition of transfer to those outside the control of the Secretary of State or the prohibition of further transfer arrangements under which rights in respect to student loans are transferred to multiple purchasers. We strongly feel that there needs to be some protection on the conditions of onward sale; otherwise there is no way in which to guarantee that this will not have a terrible and unfair effect on students—or is this clause designed to address similar issues that I raised above, regarding the ONS? Is it in the Bill simply so as to make the sales genuine? Does the Minister anticipate Clause 3 ever being used? If that is the case, it is even more dangerous. If there are no safeguards and no real intention of powers in the clause being exercised, what happens if someone tries? This is a particularly worrying aspect of the Bill and I hope that the Minister will be able to give further assurances and support our attempts to protect students’ interests. I beg to move.