The universities and science minister told a conference in London that the coalition was currently consulting the financial services industry over the sale of income-contingent student loans, which were introduced by prime minister Tony Blair in 2006. Such a sale could bring in around ?12 billion over a five-year period, starting in the next two years, Mr Willetts said.

¡°°Õ³ó±ð [student loan book] sale that happened a month or two back was the last remaining sale of the old mortgage-style loan book, which was a far inferior model for financing higher education,¡± he said in response to claims that the government had failed to reap the maximum return from that particular transaction.

The income-contingent loans were ¡°completely different¡±, he said, and would bring in ¡°more than enough to finance any likely increase in student numbers¡±.

Mr Willetts told delegates at the Study UK Annual Conference 2013 that there had been a ¡°misinterpretation¡± of the sale of the student loan book, with many in the sector wrongly believing it to be ¡°a one-off selling of the family silver¡±.

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¡°Actually, the new assets of each year¡¯s graduate repayments are accumulating. It would perfectly possible, if successive government¡¯s wished, to continue with annual programmes of sale of the graduate debt,¡± he said.

Elsewhere in his address, the minister said that despite the abolition of the student cap, number controls would remain in place for alternative providers that offer ¡°higher risk provision¡± and fail to meet ¡°high standards¡±.

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¡°°Õ³ó±ð challenge for us with alternative providers has simply been that the surge in spending on fee loans and maintenance loans has presented us with a significant fiscal challenge,¡± he said.

¡°°Õ³ó±ð number of students [accessing such support] more than doubled between 2011-12 and 2012-13, and the plans for 2013-14 were galloping ahead despite us signalling that there was some need for prudence because of expenditure pressures.¡±

He said that most of this ¡°unplanned growth¡± had come from a small number of providers that had since been asked to ¡°desist from recruiting further students this year¡±.

According to Mr Willetts, alternative providers will be able to apply for exemption for student number controls from 2015-16, but to be successful they will have to prove that they are not ¡°high risk¡±. The ability to offer validated degrees was one of the criteria that Mr Willetts suggested might be used to judge the reputation of alternative providers.

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¡°I don¡¯t like number controls either in alternative providers or in mainstream [education],¡± he said. ¡°But the level of budgetary pressure we were facing as a result of very rapid growth in alternative providers made it very difficult for us.¡±

He added: ¡°I still¡­look forward to a day when there is a single regime for all providers, regardless of their historic origins.¡±

chris.parr@tsleducation.com