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'Scandal' of foreign student loan defaulters
There is a "developing scandal" of foreign students failing to repay their student loans, the Tories warned yesterday.
Former Minister David Heathcoat-Amory said 70 per cent of overseas students were not making repayments, could not be contacted or were falling into arrears.
And Shadow Universities Minister David Evennett warned of a "much bigger problem to come" as more European Union students graduated in coming years.
But Higher Education Minister David Lammy dismissed the 70 per cent figure as "just plain wrong", saying that many students had either changed courses or were below the earnings threshold for repaying their loans.
During Commons question time, Mr Heathcoat-Amory said there were 500 loan borrowers living overseas that were in arrears.
He asked: "Is there not a developing scandal here in that UK-based students are repaying their loans through the tax system and are often having great difficulty doing so, meanwhile an increasing number of overseas students are not making their repayments, cannot be contacted or are falling into arrears."
Such cases amounted to 70 per cent of overseas students, he said, asking what legal action was being take to recover the money.
Mr Lammy said nine people were being pursued through the courts but accused Mr Heathcoat-Amory of being "a bit premature".
Around 7,100 students from the EU were entitled to loans when the system began in 2006, he said, but they did not graduate until this summer and would become entitled to begin repayments in spring 2010.
But Mr Evennett described the 70 per cent figure as "rather disappointing" and claimed the Student Loans Company was not writing to students to chase up debts.
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Saturday 26 May 2012
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