Nearly one in five student loans are now handed to foreign students, raising fears that British taxpayers could be left with a £2.2 billion bill. New research shows that in the past year, almost £4 billion in loans and maintenance grants went to international students, with EU students receiving the majority.
Repayment Risks and Taxpayer Burden
Foreign students are around 25 per cent less likely to repay their loans, meaning the British taxpayer could be expected to cover between £1.2 and £2.2 billion in unpaid fees annually. The data, from the Student Loan Company, reveals that 239,000 foreign citizens have received loans, of which 195,000 have settled status under the post-Brexit scheme.
Under the terms of the post-Brexit agreement with Brussels, people with settled status are entitled to claim student financial support. In the last year, 36,000 people successfully applied for settled status, alongside 30,000 family members of those who already have it.
Fraud Concerns and Political Reaction
Around one in every twenty new first-time student loans to international students goes to Romanian nationals, fuelling government concerns of fraud. Over the last decade, the proportion of student loans to non-UK students has jumped from 10.2 per cent to 19.3 per cent.
Shadow Education Secretary Laura Trott said: "British taxpayers shouldn't have to foot the bill for billions of pounds in loans to foreign students who may never pay them back. It's not fair or sustainable. Labour needs to get a grip on the situation."
Conservative MP Neil O'Brien told the Daily Express there were "clear signs of abuse in the system" due to the amount of funding going to family members of those with settled status. He said the figures around Romanians receiving funding was "mad" and people would be "stunned that a fifth of all student loans are now going to people who are not British".
Government Response
A Department for Education spokesman said: "We have strict eligibility requirements for student loans - nobody who lives outside of the UK can apply for or receive a loan. Anyone leaving the UK must continue to repay what they owe."
