Overseas Students: Loans

Business, Innovation and Skills written question – answered on 4th July 2012.

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Photo of Matthew Offord Matthew Offord Conservative, Hendon

To ask the Secretary of State for Business, Innovation and Skills what steps he has taken to ensure repayment of debts by EU students who take out loans with the Student Loan Company.

Photo of David Willetts David Willetts Minister of State (Universities and Science)

Since 2006/07, EU students have been entitled to loans for their tuition fees at English higher education institutions. If they choose to take out a loan, the Student Loan Company (SLC) pays their fees directly to their higher education institution.

When applying for support, EU students must provide proof of identity, and provide their home address and term-time address, and the names and addresses of two other contacts. They also provide their national insurance number if they have one, and are asked to supply email addresses, and telephone numbers.

Those staying in the UK after completing their course are all expected to obtain a national insurance number, and will make repayments through the UK tax system. The SLC has established repayment arrangements for all borrowers who move overseas, whether temporarily or permanently. The SLC asks for information about earnings and gives the borrower a monthly repayment schedule for a 12 month period. The banded overseas repayment thresholds take account of the level of affordability in different countries. This means that repayments will still be income contingent and based on ability to repay, wherever the borrower lives.

Where borrowers fail to respond to the SLC, they become liable for a standard rate of repayment of £246 per month. Where necessary, the SLC uses international tracing agents to locate borrowers and, where appropriate, legal action is taken.

The SLC is currently considering several options to make it easier for overseas borrowers to make repayments, as well as other techniques that would help increase collections.

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