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The UK running after EU student borrowers

According to information requested under the Freedom of Information Act and recently published by The Independent, the amount owed by EU graduates who have not yet repaid their student loans increased to approx. GBP 50 million (EUR 58.5 million) in the last 5 years. According to the same source, the amount owed by UK students is GBP 28 million (EUR 32.7 million).

The EU graduates who failed to repay their student debt seem to fall in 3 categories:

  • those about which the British officials knew they were overseas and reached the income threshold at which they should have started repaying their debt, but still did not start to (totalling a debt of GBP 1.6 million, i.e. about EUR 1.85 million);
  • those who failed to provide British authorities with their salary details, which made it impossible for officials to start drafting the repayment plan (totalling a debt of GBP 9.1 million, i.e. about EUR 10.6 million); and
  • those completely under the radar – who failed to communicate not only their income level, but also their current address (totalling the biggest debt, GBP 41.3 million, i.e. about EUR 48.2 million).

As for distribution by nationality, it seems that Cypriot students owe the highest amounts to the UK, some GBP 15 million (EUR 17.5 million) not being repaid, out of a total debit of GBP 24 million (EUR 28 million). They are followed by graduates from France, Germany and Poland, totalling debts of more than GBP 10 million (EUR 11.7 million). What is worrying though is that large amounts are owed by graduates from some of the countries worst-hit by the economic crisis, like Greece and Ireland, which raises the question if these countries’ graduates will really manage to repay their loans at all.

The public sector agency that administers the student loans in the UK – the Student Loan Company (SLC) – recently appointed a debt collection agency to track the EU graduates and get back the money they owed. It also said it will not refrain from legal action against the incompliant borrowers, if necessary. A heated discussion amongst the UK MPs underlined however that the British authorities are as much to blame for this situation, as they have failed to maintain tight control, allowing EU students “to disappear back home”.

The Independent