Rote learning is based on memorising facts and figures. When it comes to lessons from the last financial crisis, some regulators pledged to never revive the asset-backed securitisations that proved such terrible value for money.

The UK government this week had a memory lapse: it announced plans to sell £4bn of student loans on the ABS market. While there is little threat to financial stability, taxpayers are likely to be the long-term losers.

Such assets were dubbed "toxic" after the crisis, a description aimed at instruments whose underlying securities were subprime mortgages. The similarities with student loans are striking. Borrowers are not subject to credit checks. Almost any university student can take out a loan. Levels of arrears and losses are comparable to subprime ABS, according to Moody's.

Previously, loan bundles were sold to investors with the scale and expertise to manage them. The idea is that securitisation, where loans are sliced into senior and junior tranches depending on credit quality and buyers' risk appetite, will make them appeal to a wider range of investors. Repayments, linked to wages, should broadly rise in line with inflation.

But unlike traditional asset-backed securities, which are underpinned by collateral, such as a home or car, these are more akin to claims on future tax revenues. Student loan payments are collected by the national tax authority directly from graduates' pay cheques.

The first sale consists of a pool of loans made between 2002 and 2006. About 40 per cent of the pool's borrowers did not make a repayment in the 2014-15 financial year because they earned below the repayment threshold (currently £17,495). Normally, such delinquency would be reflected in higher yields. Yet thanks to government subsidies, the loans yield substantially less than market rates.

This means the loans will probably be priced at a substantial discount to face value and losses crystallised immediately. The government said it hoped to raise £12bn from sales of loans made before 2012, although it has not said how much it plans to sell.

If the entire portfolio of £44.5bn was offloaded this would suggest a price as low as 27p on the pound. The government says cash now is better than cash dribbling in over decades. The danger for taxpayers is that repayments are better than expected, making the bonds a steal for the City.