Half of EU students failing to repay loans: Taxpayers' £11m bill as thousands get a 'free education'

Former Tory cabinet minister Peter Lilley said enforcing the repayment of the loans may be difficult

Nearly half of European students at universities in this country could be effectively getting a free university education while their English counterparts face fees of up to £9,000 a year.
Figures show that outstanding debt owed by EU students who studied at UK universities has more than doubled to £111million in 12 months.
Up to 42 per cent of those liable to start repaying loans backed by taxpayers are failing to keep up with repayments.
Former Tory Cabinet minister Peter Lilley warned that Britain risked ‘subsidising the rest of the EU by providing their brightest and best with free education’.
With tuition fees nearly tripling from £3,375 a year to £9,000 next month, concern is rising over the possible cost to taxpayers.
Since 2006, students from EU member states have been  eligible for low-interest loans from British taxpayers to cover tuition fees, but cannot claim maintenance loans.
British-based graduates have their repayments automatically deducted from their payslips but there is no equivalent system for anyone who moves abroad.
Instead, those living outside the UK are required to supply earnings information to the Government and set up a direct debit to make repayments, or remember to pay online.
Universities minister David Willetts said in a written answer to a Parliamentary question  that ‘2,800 – or 9 per cent – of EU borrowers liable to repay were considered to be in arrears’.

The Student Loans Company said 33 per cent of Eu borrowers are classed as 'not currently repaying'

However, figures from the  Student Loans Company also show another 33 per cent of  borrowers are classed as ‘not currently repaying – further information being sought’.
This suggests that 42 per  cent of EU students in total are liable for repayments but are failing to keep up.
Meanwhile EU students’ total outstanding debt ballooned from £49.2million in 2009/10 to £111.1million in 2010/11, the  most recent year for which  figures are available.
Mr Lilley, Tory MP for Hitchin and Harpenden and a former secretary of state for social  security, said that the 80,320 EU undergraduates in this country in 2010/11 was the equivalent of ‘several universities’.

The number of EU undergraduates at UK universities has risen at a rate nearly four times higher than UK undergraduates over the last decade

‘If they do not repay – and enforcement may be difficult, which they may realise – we will need to do something to stop subsidising the EU by providing their brightest and best with free education,’ he told the Times Higher Education magazine.
Bahram Bekhradnia, director of the Higher Education Policy Institute, said there was ‘no effective means of forcing EU students to pay’.
‘As that realisation dawns increasingly on [them], I think more of them will... come here.’
He added that the effect of EU student repayments on the new loans system ‘may not be huge but it won’t be trivial.
The costs of the... system are already far higher than the government originally claimed. This will  simply add to that cost’.
The number of EU undergraduates at UK universities has increased by 56 per cent in a decade, compared with a rise of 14 per cent of UK undergraduates.

A spokesman for the Department for Business said: ‘The majority of overseas borrowers are honest and want to repay their loans. However all borrowers need to know they cannot evade their obligation to repay simply by moving overseas.
‘We actively trace those in arrears and will obtain court orders in other jurisdictions to require repayment if necessary.
‘The SLC is in the process of selecting individuals to take through the litigation process.’