Written question asked by James Clappison (Conservative) on Monday, 13 June 2005, in the House of Commons. It was due for an answer on Wednesday, 15 June 2005. It was answered by Bill Rammell (Labour) on Wednesday, 29 June 2005 on behalf of the Department for Education and Skills.

Student Loans

Question: To ask the Secretary of State for Education and Skills what legal powers are available to the Student Loans Company to obtain repayments of loans in respect of top-up fees from graduates from EU member states working outside the UK; what estimate she has made of the likely total value of such loans in each year; and if she will make a statement.

Answer: The Student Loans Company will have the power to recover loans which are not recoverable through income tax in the UK, as a debt through litigation in the courts, if there is a breach of the terms. We anticipate relying on European Council regulation 44/2001 in support of this.We estimate that the annual resource cost of fee loans issued to EU students who would work outside the UK on graduation could be around £25 million¹ (steady state at 2006/07 terms). This assumes that 91 per cent. of EU students are charged the full £3,000 fee, 9 per cent. charged £2,000, 80 per cent. of them take out a fee loan and around 75 per cent. of EU students work outside the UK after graduation. The latter assumption has been derived from data on the first destination of EU students on graduation. This data indicates that a large proportion of EU students do not go into work on graduation, the majority of these undertaking further study. In the absence of any data about the eventual employment of this group of students, we have assumed that they all enter employment outside the UK and hence, the £25 million figure could be an over-estimate.

Secondary information

Type: Written question
Reference: 4830; 435 c1633-4W
Session: 2005-06
Related items: EU Students
Tuesday, 5 July 2005
Written questions
House of Commons
Subjects: Loans Students