Proceeds from selling off the student loan book will fund an extra 30,000 university places next year, with no cap at all placed on numbers the year after.
The move was part of a number of measures to boost education and training in this morning’s Autumn Statement amid damaging figures showing the UK stagnating. Earlier this week the country failed to make the top 20 in maths, reading and science in tests taken by 15-year-olds.
Chancellor Georrge Osborne announced a further 20,000 new higher apprenticeships. Funding for them will be provided directly by HM Revenue & Customers to businesses.
A further 50,000 people will be assisted to start up businesses through start up loans.
Anyone aged 18-21 signing on without basic maths and literacy skills will be required to undertake basic training.
Those aged 16-17 years old not in education, employment or training - the so-called NEETs - will be required to undertake work experience or work placements within six months.
“A culture of wordlessness becomes entrenched when young people can leave school and expect to go on the dole with nothing in return,” said the Chancellor said.