Foreign students failing to repay loans

THOUSANDS of foreign students who have borrowed British taxpayers’ money to study at universities in England are failing to repay their loans.

Nearly half of students from European Union countries who were liable to start repaying loans could not be contacted or were in arrears as of last April.

The findings will raise concerns that many, who qualify for subsidised government loans to cover tuition fees, could effectively gain a degree without paying. The corresponding figure among UK students was only 2 per cent.

Many of the EU students had returned to their home countries and either failed to inform the Student Loan Company (SLC) of their whereabouts or let their repayments drop.

The total debt liable to be repaid by EU borrowers at the end of 2009-10 was £47.4million, according to the Department for Business. If the thousands of students missing or in arrears never pay, more than £20million would be lost to the Treasury.

The amount EU students are entitled to borrow will increase sharply this year when tuition fees increase to as much as £9,000 a year, raising concerns that the amount of unpaid debts will continue to rise.

The SLC has powers to deduct money from the wages of graduates who find jobs in Britain, but for those overseas it has to rely on their co-operation in giving information about their earnings and making their own arrangements to pay.

Officials can obtain court judgments — which are enforced by those in other EU countries — to chase debts, but such action is rare.