ACE warns that privitisation of student loans could lead to fewer engineers if loans have to be repaid at a higher interest rate
The Association for Construction and Engineering has warned that Gordon Brown’s proposed privatisation of student loans could mean fewer engineering students coming into the workplace.
In this week's Budget, the Chancellor announced plans to sell the £6bn student loan book but the ACE says it could lead to further recruitment problems for the industry.
ACE chief executive Nelson Ogunshakin said: “If this leads to a harsher repayment regime for graduates it could make it even harder to attract young people into engineering. Although we welcome the Budget's commitment to providing a training wage for 60,000 16-17 year olds, we hope that the student loan book sell-off will not make that challenge even harder."
The concern from lecturers and students unions is that privatisation will mean students paying commercial rates of interests on their loans. Since loans were introduced in 1990, students have borrowed £22bn, but repaid only £5bn.