Mrs Morgan failed to get enough votes in the St Peter Port North district
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The States member who championed the controversial introduction of student loans has lost her seat in Guernsey's Deputies Election 2008.
Wendy Morgan was one of the candidates tipped for the job of chief minister.
The deputy education minister was one of two standing deputies who did not get re-elected.
In all, 18,576 islanders cast their votes and the overall turnout was slightly down on four years ago at 55.86%.
Special sitting
Mrs Morgan said she had found it difficult to make tough decisions that were "the right thing to do for the island" but she was now being punished for it.
Mrs Morgan, who failed to get enough votes in the St Peter Port North district, said her downfall was supporting the scrapping of student loans.
"I accept that I knew when I made that speech that I was likely to lose an awful lot of votes," she said.
The first casualty of the night was Vale Deputy Brian De Jersey who lost his seat after two terms in office.
The big winners include 26-year-old newcomer Matt Fallaize, who led the way in the Vale with the biggest vote of all.
His poll topping feat was repeated by Peter Gillson in St Sampsons, where Treasury Minister Lyndon Trott saw his vote drastically reduced on four years ago.
Deputy Charles Parkinson, finished top in the south east and declared that he now has his eyes on Deputy Trott's job.
The west was won by Deputy Al Brouard, while Deputy Mark Dorey finished first in the Castel.
Two more sitting deputies - Barry Brehaut and John Gollop - won in St Peter Port's two districts.
Nominations for chief minister open at 0900 BST and all the new deputies will be sworn in at a special sitting of the Royal Court on 1 May.
The ministers of the departments and chairpersons of the committees will be elected at the States Meeting on Tuesday 6 May.
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