As well as tripling fees and changing the repayment structure of student loans in 2010, the government has been looking into ways of ridding itself of loans that predate 2012, currently worth around £40 billion. They asked Rothschild to produce a report on the possibility of selling off the loan book to private investors. The report was delivered in November 2011, but only made public in June this year after a Freedom of Information request and a botched attempt at redaction.
Rothschild found that a major obstacle to the sale would be the current cap on the interest payable on the loans: the base rate plus 1 per cent or RPI, whichever is lower. On those terms it wouldn’t be a sufficiently attractive investment for the private sector. The report proposes either that the government guarantee profits by means of a ‘synthetic hedge’, or that the cap on interest rates be lifted. So to make a future privatised student loan book profitable, either taxpayers would pay, or students would pay more. The report includes suggested talking points for ministers: ‘We all live in difficult times… You have a deal which is so much better than your younger siblings’ – the familiar appeal to ‘fairness’ as a justification for shafting people.
The Student Assembly Against Austerity, a new organisation that has sprung from the mainly trade union-led People’s Assembly Against Austerity, today called a ‘national day of action’ against the possible sell off. There were demonstrations in twenty cities, including Manchester, where I am at the moment, doing some research in the City Art Gallery archives.
The Student Union has changed a lot since my teens, when I used to go there to see bands like Billy Talent and Dropkick Murphys. The building is still named after Steve Biko, as is the swish new coffee bar (‘Biko’s – Meet and Eat’), but generally the union, like the rest of the Oxford Road campus, bears all the marks of the rapid expansion and corporatisation of the university begun by the late Alan Gilbert, vice-chancellor from 2004 to 2010.
There were about fifteen students gathered in the lobby, collecting up cardboard boxes painted red and labelled ‘DEBT’ in big white letters. According to Joel, a fourth year physicist, most of them were Green Party members: apparently Manchester has the largest membership of any UK university. Tyler, a third year planning student, thanked god he made it to university before the fees reached £9000. Though he’s liable (as am I) to pay higher interest once the loan book is sold off.
We made our way over the road to University Place, where most of the big lecture theatres are. Some of the group lay down on the floor and covered themselves in boxes – crushed by a mountain of debt – while the others leafleted students entering the building.
Unlike with other student demonstrations I’ve been on, there was no way to target the object of the protesters’ anger; the university itself isn’t exactly to blame (though it seems to have made its peace with the new regime), and the government is 160 miles away. So their main aim was to raise awareness among other students of the implications of the loan book sale. It needs raising: in some cases even the direct question ‘Do you want to pay more interest on your loan?’ drew blank looks.
After a while we moved back across the road to the Alan Gilbert Learning Commons, which opened last year, and rebuilt the debt mountain. The CCTV cameras followed us as we moved around the lobby. Shortly afterwards five university security guards came in. One had a body-mounted CCTV camera and was talking into it. I went to the archives.