Private eyes to track down EU students who owe £50m in loans

British taxpayers will have to pay for graduates who have left the country without repaying debts

Private investigators have been called in to track down hundreds of overseas graduates from UK universities who have gone missing owing millions of pounds in loans bankrolled by the British taxpayer.

The Student Loans Company (SLC) has been forced to take dramatic measures to claw back its money after the amount owed by European Union graduates who are not repaying their tuition-fee loans rose to more than £50m in five years.

Hundreds of EU nationals who have returned home and reached the income threshold at which they should be paying back their loans have slipped into arrears. Many have failed to provide any salary details, so that officials cannot even start the process of reclaiming their debts.

But many more, who are responsible for loans totalling £41m, have not revealed crucial information about where they are living, whether they are working, or how much they are earning.

MPs complained yesterday that a failure to maintain tight controls over EU students had allowed them to disappear back home, leaving the British taxpayer to pick up the tab for their education. The Labour MP Frank Field said he would urge the National Audit Office to investigate the system of keeping tabs on EU students. "This situation has turned the loans into a grants system for many EU students," he said.

Andrew Percy, a Tory MP, said: "With British students paying more in tuition than ever before, many people will not understand how it is possible that foreign students from the EU are able to turn up to the UK, run up taxpayer-backed debts and then leave. Many of these students will never contribute a penny in income tax to the UK and will be incredibly expensive to track down."

Officials from the SLC, a public-sector agency, confirmed that they had appointed a tracing agency to locate EU graduates and claw back their debts, amid official warnings that up to one in four will never pay a penny back. The Government-owned organisation has made it clear that, if necessary, it will take graduates to court to ensure they honour the terms to which they signed up.

The SLC was set up in 1989 to provide loans and grants to students at UK universities and colleges. It has paid out more than £117m to EU students in five years after it was obliged to offer them financial support following the introduction of tuition fees in 2006-07. But official figures show that, by last year, repayments from borrowers responsible for almost £52m of the total had dried up – or had never started. (The total amount owed by UK graduates is £28m.)

EU graduates owing £1.6m were officially listed as "known to be overseas – above the earnings threshold for that country and fallen into arrears", while those identified as "known to be overseas – has not provided details of income and is now considered to be in arrears" owed a total of £9.1m. But the total owed by borrowers in the category "not currently repaying – further information required to establish correct repayment status" amounted to £41.3m.

Students from Cyprus borrowed the most from the SLC, but £15m of their £24m debt is not being repaid. Graduates from France, Germany and Poland ran up tuition-fee debts of more than £10m, but the SLC figures reveal that it is owed huge sums by former students from some of the most recession-hit countries in the EU, including Ireland and Greece.

To tighten up controls over repayment rates, the SLC introduced a new system requiring graduates to complete an overseas assessment form as soon as the organisation is informed that the customer is going abroad. If the graduate fails to respond within 14 days, they are issued with a fixed repayment schedule.

If they do not maintain this then they are considered to be in arrears, triggering the "normal collections processes". The SLC has stressed that, by placing customers in arrears, it can "actively pursue customers who have not provided adequate information to allow repayment amounts to be calculated".

An SLC spokesman said borrowers who moved abroad without informing the organisation faced action from "international trace agents", additional financial penalties and legal action.

Rob Wilson MP, a former Tory education spokesman, said: "The SLC has been put in a very difficult position by the nonsense of the UK being forced to allow EU students equal access to financial support." The Tory MP Peter Lilley said: "This is an area where Britain should be seeking the repatriation of powers in a future renegotiation."

Suggested Topics
News
The two faces revealed by the ultraviolet light
newsScholars left shaken after shining ultraviolet light on 500-year-old Welsh manuscript
News
Rosamund Pike played Bond girld Miranda Frost, who died in Die Another Day (PA)
news
Arts and Entertainment
books
News
newsHow do you get your party leader to embrace a message and then stick to it? With people like this
Have you tried new the Independent Digital Edition apps?
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs Student

Guru Careers: Junior Web Developer

£18 - 22k (DOE) + Benefits & Stock Options: Guru Careers: Junior Developer / J...

Recruitment Genius: Graduate Structural Engineer

£17000 - £22000 per annum: Recruitment Genius: A Graduate Structural Engineer ...

Guru Careers: Graduate Sales Executive

£18 - 24k OTE + Uncapped Commission: Guru Careers: A Graduate Sales Executive ...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat