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
Arts and Entertainment
Joe Cocker performing on the Stravinski hall stage during the Montreux Jazz Festival, in Montreux, Switzerland in 2002
musicHe 'turned my song into an anthem', says former Beatle
News
Clarke Carlisle
sport
Sport
footballStoke City vs Chelsea match report
Arts and Entertainment
theatreThe US stars who've taken to UK panto, from Hasselhoff to Hall
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
News
newsIt was due to be auctioned off for charity
News
Coca-Cola has become one of the largest companies in the world to push staff towards switching off their voicemails, in a move intended to streamline operations and boost productivity
peopleCoca-Cola staff urged to switch it off to boost productivity
Environment
Sir David Attenborough
environment... as well as a plant and a spider
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs Student

SThree: Graduate Recruitment Consultant

£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

FDM Group: Business and Technical IT Consultants – London, Manchester, Glasgow

21,000-24,000: FDM Group: Kick-start your career and join FDM’s award-winning ...

FDM Group: Business and Technical IT Consultants – Birmingham

21,000-24,000: FDM Group: Kick-start your career and join FDM’s award-winning ...

Ashdown Group: Trainee / Graduate Helpdesk Analyst

£20000 per annum: Ashdown Group: A highly reputable business is looking to rec...

Independent Dating
and  

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

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there