Foreign graduates who have studied at UK universities owe
millions of pounds in unpaid loans yet only nine have been taken to
court
According to new data which was obtained under
the Freedom of Information Act, nearly half of all students from
European Union countries are failing to meet their repayments. The
information shows that many EU students are effectively gaining a
degree for free.
The figures show that 43% of graduates from the
26 EU countries outside the UK have disappeared or were in arrears
as of last April. The total outstanding debt at the end of 2009/10
was £47.4 million. Money owed to by graduates living in the UK is
recovered automatically through the tax system when they start
earning over £15,000 which increases to £21,000 when this years’
tuition fees increase starts.
A UK-based “tracing and collection agency” is
being used to target these graduates, if they are found then fines
could be added to their loan balances and then if the repayments
are still not forthcoming then legal action could be taken. Yet
among the 2,100 foreign non-payers, three quarters of them have
been labelled as “not currently repaying – further information
required to establish correct repayment status”, which suggests
that the Student Loans Company (SLC) has lost track of them.
The figures show that officials are still not
exercising their power to obtain judgements in British courts,
which would then be followed by those in other EU countries.
Professor Alan Smithers, the director of the centre for
education and employment research at Buckingham University, said:
“One of the weaknesses of the fees and loans system is the
difficulty in recovering money from a number of groups, and chief
among them is graduates that come from the 26 other European
countries.
“We really ought to be able to negotiate through the European
Union a set of procedures that can enable us to recover this
money.”
Emma Boon, campaign director at the Taxpayers
Alliance ahs called for the process of tracing foreign students to
be more rigorous. Emma called for the SLC to be more diligent about
checks before it hands over the loan in order to prevent UK
taxpayers from having to pay off the debt.
In response a spokesman for the SLC said “We
are currently in the process of reviewing accounts both UK and EU
borrowers who are known to reside overseas and who are in arrears,
with a view to issuing legal proceedings against those who do not
respond to initial letters,”
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