By GB News (World News) | Created at 2026-08-07 05:41:02 | Updated at 2026-08-07 06:33:24
1 hour ago
Non-British citizens now receive as many as one in five student loans in the UK, potentially costing taxpayers billions in debt which may never be repaid.
Foreign students were handed around £4billion in tuition and maintenance loans over the past year, accounting for about 20 per cent of all lending through the scheme.
EU citizens received the bulk of this money, with Romanians alone taking one in 20 first-time loans.
As well as Government concerns that the system is vulnerable to fraud, fears are also rising of a massive new "black hole".
Foreign borrowers are around 25 per cent less likely to pay back their loans compared with British students, according to the research.
That gap means British taxpayers could be losing between £1.2billion and £2.2billion every year on unpaid debt.
Student loans are generally unavailable to foreign nationals studying in Britain, but an exemption exists for EU citizens who hold settled status under the post-Brexit deal.
Student Loans Company data shows that roughly 195,000 of the 239,000 foreign loan recipients hold settled status.
Over the past decade, the share of loans going to non-UK students has nearly doubled, rising from 10.2 per cent to 19.3 per cent.
Conservative MP Neil O'Brien, who compiled the figures through parliamentary questions and FOI requests, believes the scheme is being exploited long after its deadline expired.
Non-British citizens now receive as many as one in five student loans in the UK
PA
"In the past 12 months alone, around 66,000 completely new applicants gained residency via this scheme, five years after the deadline," he said.
"Why are the Home Office allowing these implausibly late claims, and on what basis are they still being granted?"
Mr O'Brien, the Tories' head of policy, has warned of a direct connection between rising foreign student loans and ongoing settled status claims.
"My worry is that too many of these people will leave and not repay, or are getting the loan to top up their income while mainly working and doing a bit of studying," he said.
"If we stop the flow of new EU settled status claims, the flow of EU student loans is likely to dry up too."
"Foreign nationals received £4billion in student loans in the last academic year. Yet the Department for Education has no idea how much of this we will get back or not but we could easily be losing over £2billion a year on loans we should not be making," he added.
Neil O'Brien has warned of a direct connection between rising foreign student loans and ongoing settled status claims
Bridget Phillipson admitted earlier this year a 'disproportionate' number of Romanians were receiving student loans
The cross-party letter, organised by campaign group Rethink Repayment, described the system as an "unsustainable and unfair financial burden."
Education Secretary Lucy Powell said last week the matter was at the "top of my in-tray," having previously called the interest rates on loans "egregious".
A Department for Education spokesman said: "We have strict eligibility requirements for student loans nobody who lives outside of the UK can apply for or receive a loan. Anyone leaving the UK must continue to repay what they owe.
"The Student Loans Company can take enforcement action and uses debt collection agencies. The public rightly expect these debts to be paid, and we are working with them to go further.
"We are also cracking down on abuse of student finance at its source, closing loopholes in regulation and preventing misuse of the system."
