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Posted June 7, 2013

Government Says Students Can't Evade Repaying Loans

The government has given a warning to overseas students who have borrowed money to study in the UK, stating that they cannot evade repaying their student loans by leaving the UK to live in another country. The warning comes after information was released to the Sunday Times under the Freedom of Information Act, showing that foreign students owe more than £50 million in unpaid tuition fees.

The Student Loans Company has revealed that they have hired private investigators to track down large numbers of overseas graduates in order to make them begin repayments on their student loans. Students from Cyprus owe the largest sum, amounting to £15 million between 2007 and 2012, and with the country in such dire financial trouble, these debts are looking increasingly unlikely to be repaid.

The outstanding loan amounts were not just from struggling countries such as Cyprus, but also from some of the wealthier EU countries including Germany and France. The government wanted to make it clear that the overwhelming majority of overseas students were honest, and had full intentions of repaying their loans, and it was a small minority who believed that by moving overseas they would be able avoid paying it back.
 

Repayment Terms

Students are not expected to start repaying their student loans until they are earning over a certain threshold, but this still includes overseas earnings, and cannot be avoided by moving abroad after graduation. The Department of Business, Innovation, and Skills stated that they “actively trace those in arrears and will obtain court orders in other jurisdictions to require repayment if necessary,” sending out a message to foreign students that getting away without paying is not as easy as it may seem.
 

The Student Loans Company has admitted that it is owed as much as £41 million by overseas students who have not given any details of their whereabouts or whether they are earning money or not. Students still owing money on their student loans are supposed to inform the company of their location and employment status, although the evidence suggests that this is not being check vigilantly enough at the present time. The SLC is trying to get a handle on the situation and are getting results by “using international trace agents and can charge penalties which can be added to their loan balance and commence legal action to recover the full balance.”

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