Sale of Student Loans Act 2008
| Year | 2008 |
Sale of Student Loans Act 2008
2008 Chapter 10
An Act to enable the sale of rights to repayments of student loans; and for connected purposes.
[21st July 2008]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
1 Sale of student loans
(1) The Secretary of State may enter into arrangements ("transfer arrangements") under which rights of the Secretary of State in respect of student loans are transferred to another person ("the loan purchaser").
(2) In subsection (1) "student loans" means loans made by the Secretary of State in accordance with regulations under section 22 of the Teaching and Higher Education Act 1998 (c. 30)
("loan regulations").
(3) Transfer arrangements may relate to—
(a) specified loans or a specified class of loan;
(b) some or all of the Secretary of State's rights.
(4) Transfer arrangements may include provision—
(a) transferring to the loan purchaser an obligation of the Secretary of State in connection with a loan;
(b) transferring to the loan purchaser the benefit of an obligation or undertaking of the borrower in respect of a loan (whether deriving from loan regulations or from arrangements agreed between the borrower and the Secretary of State in respect of the loan ("loan arrangements"));
(c) for warranties or indemnities or other obligations of the Secretary of State;
(d) enabling the Secretary of State to require a loan purchaser to make specified arrangements in connection with the administration of loans (whether by appointing a specified agent for specified purposes, or otherwise);
(e) prohibiting the loan purchaser from making specified arrangements without the Secretary of State's consent;
(f) specifying consequences of the breach of a provision of the transfer arrangements.
(5) Transfer arrangements shall have effect (and, in particular, a provision transferring rights or obligations is sufficient to effect the transfer).
(6) Transfer arrangements may be made—
(a) without the borrower's consent;
(b) without notice to the borrower.
(7) The Secretary of State shall take reasonable steps to notify the borrower within three months of transfer arrangements taking effect.
(8) A loan in respect of which transfer arrangements are made may be referred to as a "transferred loan".
2 Sales: supplemental
(1) Transfer arrangements may include any provision that the Secretary of State thinks appropriate (in addition to provision specifically permitted by this section or section 1).
(2) Transfer arrangements may include provision—
(a) for repayments and other sums to be paid by the Secretary of State to the loan purchaser (having been collected by or on behalf of the Secretary of State),
(b) for those payments to be made by reference to estimates, and
(c) for repayments to or deductions by the Secretary of State in case of overpayment.
(3) Transfer arrangements may include provision as to who is entitled to interest, penalties or charges imposed or incurred after the transfer.
(4) Transfer arrangements may include provision for the Secretary of State to pay compensation to the loan purchaser—
(a) to reflect regulations under section 186 of the Education Act 2002 (c. 32) (reduction of balances, &c.),
(b) in connection with amendments of loan regulations, or
(c) in other specified circumstances.
(5) Transfer arrangements may include undertakings by the Secretary of State about the power to make loan regulations; in particular—
(a) the Secretary of State may undertake to exercise the power so as to achieve a specified result,
(b) the Secretary of State may undertake not to exercise the power so as to achieve a specified result,
(c) the Secretary of State may undertake to follow, or not to follow, a specified procedure in connection with the power,
(d) the Secretary of State may give undertakings about the indices, information or other matters to be used or considered for the purposes of section 22(4)(a)(i) of the Teaching and Higher Education Act 1998 (c. 30) (interest rate to maintain real-terms value of outstanding amounts), and
(e) a loan purchaser may enforce an undertaking by way of legal proceedings in public law, private law or both.
(6) In subsection (5) the reference to loan regulations includes a reference to regulations under section 186 of the Education Act 2002 (c. 32)
.
(7) Transfer arrangements may include provision for repurchase in specified circumstances.
(8) Transfer arrangements may provide for the appointment of a person to consider disputes between the loan purchaser and the borrower in respect of a transferred loan.
(9) Transfer arrangements may make consequential amendment of a document forming part of, or issued in connection with, loan arrangements.
(10) The Secretary of State may incur expenditure in connection with transfer arrangements.
3 Onward sales
(1) Rights transferred by transfer arrangements may be further transferred by arrangements between the loan purchaser and another person ("further transfer arrangements").
(2) In this Act (including this section) a reference to transfer arrangements includes a reference to further transfer arrangements.
(3) In the application of this Act to further transfer arrangements—
(a) a reference to a loan purchaser is a reference to the transferee under the further transfer arrangements ("the further transferee"), and
(b) in section 1(3)(b), (4)(a) and (c) and (7) a reference to the Secretary of State is a reference to the transferor under the further transfer arrangements.
(4) Subsection (1) is subject to any provision of transfer arrangements prohibiting, restricting or controlling further transfer.
(5) Further transfer arrangements may include provision—
(a) transferring to the further transferee an obligation of the loan purchaser in connection with a loan;
(b) transferring to the further transferee the benefit of an obligation or undertaking of the borrower in respect of a loan (however deriving);
(c) transferring to the further transferee the benefit of warranties or indemnities or other obligations of the Secretary of State under transfer arrangements.
(6) Transfer arrangements may—
(a) prohibit the making of further transfer arrangements without the Secretary of State's consent;
(b) require further transfer arrangements to be effected by way of novation or other arrangements to which the Secretary of State is a party;
(c) include provision by virtue of which the Secretary of State is automatically a party to further transfer arrangements (and may enforce any of their terms).
(7) In entering into transfer arrangements the Secretary of State shall ensure (whether by reliance on subsection (6)(b) or (c) or otherwise) that the Secretary of State will be party to any further transfer arrangements.
(8) The Secretary of State may enter into arrangements, under or in accordance with transfer arrangements, in connection with further transfer.
(9) References in this section to the further transfer of transferred rights do not include references to arrangements under which—
(a) transferred rights become held on trust,
(b) other equitable interests are created or transferred in relation to transferred rights, or
(c) securities are granted in respect of transferred rights.
4 Report
(1) After entering into transfer arrangements the Secretary of State shall lay before Parliament a report about the arrangements.
(2) The report must include information about the extent to...
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