EU graduates 'cannot evade' loan repayments

http://www.bbc.co.uk/news/uk-22500989

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The government has warned overseas graduates who borrowed money to study in the UK that they cannot evade their obligation to repay by moving overseas.

The response came after a Freedom of Information request by the Independent on Sunday revealed EU students owe the UK £50m in unpaid tuition fee loans.

The Student Loans Company has hired private investigators to track down hundreds of the overseas graduates.

More than £15m of loans to graduates from Cyprus are not being repaid.

Students from the country, which has been in dire financial trouble, borrowed the largest amount from the UK government between 2007 and 2012.

'Court orders'

Graduates from wealthier EU countries, including France and Germany, were also shown to have not started to repay their loans.

A spokesman for the Department for Business, Innovation and Skills said: "The overwhelming majority of overseas borrowers are honest and want to repay the loans they have received.

"However all borrowers need to know that 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."

Student loans should start to be repaid when graduates earn an income over a certain threshold.

But the Student Loans Company (SLC) figures showed that more than £41m is owed by EU students who have not given any details of where they are living and whether they are working.

SLC's head of repayment, Kevin O'Connor, said: "Customers with student loans who move abroad must inform the Student Loans Company.

"If they do not, we trace borrowers using international trace agents and can charge additional penalties which can be added to their loan balance and commence legal action to recover the full balance."

He added that the SLC is in the process of issuing legal proceedings "against those who do not respond to us".

As well as those who have not provided any details to the SLC, there are others who are known to be overseas and have fallen into arrears, either because they have not provided details of their income or they are above the earnings threshold and have not been making repayments.