Colin Ward, assistant managing director of the Student Loans Company, is to become chief executive for three years from January 1.
Mr Ward joined the company in 1990, but Sir Eric Ash, acting chief executive for the past year, stressed that the appointment was not made on a "Buggins' turn" basis. Headhunters were involved in helping fill the advertised post, which attracted 230 applicants, with a final shortlist of Mr Ward and three external candidates.
"I think he's a terrific bloke," Sir Eric said.
Sir Eric's appointment has been part time, and he said that while he and Mr Ward had been working in tandem, the company needed a full-time chief executive.
Mr Ward, former chief accountant with the Scottish Development Agency, was initially responsible for setting up the company's lending, collection and information technology operations, but was distanced from last year's reapplications fiasco until he was brought in as a firefighter. He has worked alongside Sir Eric this year in revamping the administration system.