Baliffs chasing student loans overseas
This latest crackdown has emerged from recent figures displaying that around 16,000 British and 7,000 EU graduates are currently living abroad, whilst in arrears with the Student Loan Company. Government Ministers have declared the importance of paying these arrears, due to their contribution to a projected £330 billion debt by 2044.
Government funding has been put behind the initiative alongside a pilot project, to extend the use of ‘debt collection processes overseas for those seeking to evade their responsibility.’ Ministers are also considering allocating extra resources in order to combat the unpaid debt that is mounting from students moving abroad, with most of them being primarily UK-based.
Despite the pressing issue, Ministers yesterday refused to hold an ‘urgent’ review of the student loans system. The ministers defended their decision, stating that there was ‘no immediate pressure’ in the system, however The Commons Business, Innovation and Skills Committee (BIS) warned in July that the scheme was at tipping point due to bungled Government sums and lax debt collection.
The concern surrounding the lack of these student repayments have been rife due to the chunk of government funding that is lost leading to lack of funding in other public sector spending, as the coalition loses 45 pence in every pound it lends to students.
The committee admitted that there could be more prevention measures in place to minimise the unpaid debts, and admitted that it “becomes difficult when borrowers move overseas without either informing the SLC or establishing a repayment schedule.’ The committee did however confess that they were trying to combat the issue at the source, as they are “in discussion with several countries to develop mutual processes for identifying overseas nationals who are not making the Higher Education repayments which are due.”
Currently 2,928,000 UK students are eligible to make student loan repayments but of those, 383,000 are failing to provide earnings information and 16,000 are living abroad and in arrears. This non-repayment rate is 13.7 per cent.
Adrian Bailey, chair of the BIS Committee, said yesterday: ‘Under the current student loan system for students residing in England, the Government loses around 45p on every £1 it loans out.
‘With the prospect of a large potential black hole in the government’s budget figures, it is all the more alarming that the Government has refused to conduct a review of the current student loan system.’