Lovell White Durrant has been appointed to advise the Department of Education and Employment on the controversial privatisation of the student loan scheme.
The department wants to sell part of the £2bn student loan portfolio and contract out the administrative work of the Students Loan Company, which handles the accounts of 1.3 million students and is owned by the DoEE.
Lovells acted for the department in an aborted plan to allow banks to offer student loans. This would have given students the choice of taking out a loan, under the same terms, from the Student Loan Company or from a Government-subsidised bank. The project was abandoned by the department after doubts were raised about value for money for the tax payer.
Banking partner Geoffrey Yeowart, who will be leading the Lovells team, said one option the DoEE was now looking at was securitising part of the loans portfolio to package it in a way that would be attractive to investors. “A possible model is the well-estab- lished market in the US for student loans, which are packaged and sold to investors as Sallie Mae securities,” he said.
Lovells was chosen from a short list of three or four firms which were invited to tender. NM Rothschild & Sons was appointed as financial adviser and Shreeveport as management consultants.