August M
Britain’s student loan system is under renewed scrutiny after figures revealed that officials cannot verify the financial status of hundreds of thousands of former students.
The scale of the gap has prompted warnings that taxpayers could be left footing a multi-billion-pound bill.
Hundreds unaccounted for
According to figures reported by the Daily Mail, the Student Loans Company (SLC) has no up-to-date employment or income details for more than 370,000 borrowers. Together, those graduates owe close to £13 billion in outstanding loans.
Many of the unverified borrowers are EU nationals who returned to their home countries after studying in Britain, or UK graduates who have since moved abroad. Others may be unemployed, claiming benefits or earning below the repayment threshold.
‘Leak’ in repayments
Nick Hillman, director of the Higher Education Policy Institute (HEPI), warned that the figures suggest a serious structural weakness. “These large numbers show a huge potential leak from the student loan system,” he said, as quoted by the Daily Mail.
He added that while many graduates are angry about the cost of higher education, unpaid loans do not simply disappear. “Someone will eventually have to pick up the tab for those who go entirely missing from the system,” Hillman said, pointing to New Zealand’s tougher penalties for late repayment as a possible model.
MPs demand answers
Independent MP Rupert Lowe, who obtained the figures through a written parliamentary question, said the situation warranted a full investigation. He argued that the system may be open to abuse by foreign students who never intend to repay their loans.
“I believe there is an industrial scam ongoing,” Lowe said, claiming that some students take out loans and then leave the UK permanently. He called the situation “gross incompetence at best, industrial fraud at worst”.
Taxpayer risk grows
Conservative education spokesman Richard Fuller told The Telegraph that the taxpayer could face a “colossal tab”. He said student loans should be managed with the same care as household finances.
As of December, total outstanding student loan debt stood at £226 billion. The £12.8 billion linked to unverified borrowers accounts for around 5.7 per cent of the total.
Official response
The SLC denied that all unverified borrowers are missing, stressing that some may not yet be required to repay or could be temporarily abroad. Graduates are required to inform the SLC if they leave the UK for more than three months.
Debt debate widens
The revelations come amid growing debate over tuition fees and student debt. A YouGov poll cited by the Daily Mail found that 44 per cent of Britons support writing off some or all student loans, while 76 per cent believe current interest rates are too high.
Sources: Daily Mail, Student Loans Company, HEPI, The Telegraph, YouGov
