Thousands of students from across Europe who studied at UK universities have reportedly left the country without repaying any of the £893 million in loans used to fund their education.
Latest figures from the Student Loans Company (SLC) show it is currently attempting to trace more than 42,000 former students whose whereabouts are unknown.
The SLC has repeatedly stressed that moving abroad does not remove a person’s responsibility to repay their student loan. To tackle the issue, the Government-owned organisation has been working alongside authorities across Europe to track down borrowers living overseas.
However, recovering debts from graduates abroad is far more challenging than within the UK. While officials can use domestic tax records to identify borrowers at home, they do not have the same powers in other countries.
In total, the SLC says it is trying to locate around 121,000 former students who collectively owe £3.4 billion.
Among them, roughly 15,000 are believed to be living in Australia, 7,600 in the United States, and around 5,500 each in Spain and Ireland. There are also an estimated 5,300 graduates in the United Arab Emirates, 3,500 in Bulgaria, 3,500 in Romania, and around 1,500 in China.
Student loans are designed to cover tuition fees and living expenses while individuals are at university, with repayments beginning once they leave their studies and meet the required earnings threshold.
The SLC noted that not everyone with an outstanding loan is currently required to make repayments. Some borrowers may be unemployed, between jobs, earning below the repayment threshold, or receiving benefits.
Callum McGoldrick, investigations campaign manager at the TaxPayers’ Alliance, said taxpayers would be frustrated to see billions of pounds in student debt sitting overseas while the public carries the cost.
He argued ministers need to take stronger action to enforce repayments or risk leaving taxpayers to continue covering the losses.
Christopher McGovern, chairman of the Campaign for Real Education, told the Daily Mail that taxpayers were effectively being “robbed”. He suggested overseas students should no longer have access to UK student loans and proposed that British students provide a repayment guarantor, such as a parent.
Responding to the criticism, an SLC spokesman said the overwhelming majority of borrowers comply with the terms of their loans and repay through the correct channels.
He added that during the 2024-25 financial year, more than 90 per cent of customers had a verified residency and employment status. Borrowers are required to inform the SLC if they plan to live overseas for three months or more and must provide income information so appropriate repayment arrangements can be put in place.
