Overseas Students: Loans

Mr. Rob Wilson
To ask the Secretary of State for Innovation, Universities and Skills what mechanisms are in place to ensure repayment of student loans provided by the Student Loans Company by European Union nationals living outside the UK.

Bill Rammell
[holding answer 3 March 2008]: The Student Loans Company has established payment arrangements for borrowers from other European Union countries who dropped out of their studies and became due to make repayment in April 2007, or who have graduated and become eligible to repay from April 2008. These existing arrangements will continue to apply when the first full cohort of borrowers from EU countries enters into repayment in April 2010.

The SLC has written to all EU borrowers due to start repayment and asked them to confirm the address where they expect to reside after graduation. If they are staying in the UK they will be expected to obtain a national insurance number and make repayments through the UK tax system. If they are going abroad they will be asked to supply an address and complete an overseas assessment form to allow repayments to be scheduled. These borrowers have been made aware of the variety of methods of repayment available to them.

So that all who can pay contribute to the costs of their education we have put in place variable threshold bands which are dependent on where the borrower lives. Effective collection across the EU is underpinned by EC regulation 44/2001, which allows the SLC to obtain judgments in UK courts, which can be enforced by courts in other EU countries.

In support of the EU repayment process the SLC is developing an enforcement strategy for borrowers who move abroad but who do not provide income details. This work is focussing on the collection of penalties, arrears and the movement of borrowers into litigation where this is appropriate. The SLC is piloting work in these areas and expects to have final arrangements in place by April 2009.