Thousands of European students 'failing to repay loans'

Figures show that as many as 13,000 students from mainland Europe could be withholding cash after finishing degree courses. In many cases, students have disappeared, struggled to keep up with repayments or failed to submit vital information to Government officials.

The findings will fuel fresh concerns that many European students, who can claim subsidised loans to cover the cost of tuition fees, could effectively gain a degree for free. It comes as separate data shows that the total amount of student debt topped £40 billion for the first time this year – up from less than £30bn just two years ago.

This includes £349m borrowed by European students – more than double the total in 2009/10. The Student Loans Company insisted most of these loans were not yet liable for repayment.

A spokeswoman added: “We are currently in the process of reviewing accounts of all 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 correspondence from the SLC.”

According to latest figures, 29,600 European students are currently liable to make repayments after taking out student loans. Of those, 2,400 have failed to provide the SLC with details of income and have officially been “placed in arrears”, while another 400 have defaulted on their repayments.

Further information is being sought from some 9,900 students who are “not currently repaying”, according to figures. Most remaining students have either paid off loans or sit below earning thresholds needed to make repayments.