Unpaid EU student loan debt doubles

Unpaid debt from EU students who have studied at UK universities has doubled to £111m in the last 12 months, according to new data from the Student Loans Company.

And more than 40% of those expected to repay are struggling to keep to repayment installments. Unlike British students, the loans aren't deducted from wageslips.

Free education?

"If," Tory MP Peter Lilley told The Times Higher Education magazine, "they do not repay - and enforcement may be difficult, which they may realise - we will need to do something to stop subsidising the EU by providing their brightest and best with free education."

UK graduates see their outstanding student loans deducted automatically from their monthly wage cheque. Additionally, it's estimated that 33% of those currently in arrears were not currently repaying any student loan debt. The number of EU students attending UK universities has climbed sharply in the last 10 years - a 56% rise.

In 2010-11 the Higher Education Statistics Agency (HESA) estimates there were 80,320 EU undergraduates studying at UK universities while the UK total student population is thought to be 1.7 million.

Enforcement issues

Part of the problem is that much of the eurozone is in a deep economic depression. Many of the job opportunities once open to EU graduates have closed, or are more difficult to find. Wages in many EU countries are substantially lower than they are in the UK, meaning some many not be legally obliged to pay back anything. A degree for free, in other words.

In theory, judgments in British courts, enforced by other EU countries, can be made to chase debts, but this is not commonplace yet. The Student Loans Company told AOL Money it had taken just nine overseas borrowers to court. "Satisfactory arrangements are in place now for some and others are still going through the court processes."

In a bizarre twist it has also emerged that the Student Loans Company collected an extra £36.5m in 2010-11 from British students it shouldn't have.

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