The SLC was established in 1989 to provide loans and grants to students studying in the UK. From 1990 to 1998 these were mortgage-style loans, which were aimed at helping students with the cost of living and repaid directly to the SLC. From 1998, with the introduction of tuition fees in the UK, the SLC instead began providing loans under an income-contingent repayment scheme. From 2006, loans covered the cost of tuition fees in addition to living costs. Repayments for these loans are collected by HMRC via the PAYE tax system. The ICR loan scheme was replaced with a new ICR scheme in 2012 to include a longer repayment period following an increase in tuition fees.
In the late 1990s, the government sold two tranches of the mortgage-style loans to investors. Firstly in 1998 to Greenwich NatWest raising £1bn, and secondly in 1999 to Deutsche Bank and the Nationwide Building Society, also raising £1bn. The SLC's remaining mortgage-style loans, for which payments were mostly in arrears, were sold to a consortium, Erudio Student Loans, in 2013 for £160m. In 2014, the government indicated that it would start selling the SLC's £12bn book of 1998 - 2012 ICR loans to improve the UK public finances. The first ICR debt sale was completed in December 2017 with English loans which entered repayment between 2002 and 2006. The debt sale was completed with the loans being sold to Income Contingent Student Loans 1 Plc; a group of silent investors. The SLC will remain responsible for the day-to-day administration of all duties related to the repayment of these loans, and repayments will be paid on to the Investors. As was true in the previous debt sales, the same is true for this first ICR debt sale in that the new debt owner are unable to change any aspect of the terms and conditions that applied when a borrower entered into their contract to receive their student loans.
Controversy
In July 2014, the SLC was accused of using controversial tactics akin to those of the payday loans company Wonga after it was discovered that it had been sending out letters from what appeared to be an independent debt collection agency called Smith Lawson & Company.. The SLC announced it was suspending the use of the letters, which it said had used the "secondary brand" to avoid paying fees to a conventional debt collection agency.
