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Student Loans Going to Foreigners
— 3 mins read
Non-British students borrowed £4 billion last year, and half of foreign borrowers made no repayment
One in five student loans now goes to non-British citizens, with foreign students receiving about £4 billion in tuition and maintenance loans in the past year, Student Loans Company figures show.
The data, obtained by Conservative MP Neil O'Brien through parliamentary questions and freedom of information requests, was reported by The Times. The vast majority of the money went to EU citizens. Romanians alone took one in 20 of all first-time loans.
How foreign citizens qualify for British student loans
Student loans are not normally available to citizens of other countries studying in the UK. But EU citizens with settled status under the post-Brexit settlement scheme are entitled to claim. Of the 239,000 foreign citizens receiving loans, about 195,000 hold settled status.
The share of loans going to non-UK students has risen from 10.2% to 19.3% in a decade.
The deadline to apply for settled status passed on 30 June 2021. Yet the Home Office is still granting applications. More than 160,000 late applicants have been given settled status since the deadline, and around 66,000 new applicants gained residency in the past 12 months alone, according to [Home Office statistics].
'Why are the Home Office allowing these implausibly late claims, and on what basis are they still being granted?' Mr O'Brien said. He added: 'This is not right, not fair, and not sustainable.'
Settled status requires proof of UK residence before Brexit, so many of these borrowers are long-term residents rather than recent arrivals. Mr O'Brien leads policy for the Conservatives and has campaigned to end late settlement claims.
Half of foreign borrowers made no repayment last year
Just 51% of non-UK nationals made a loan repayment last year, compared with 68% of British students. Fewer than 45% of Romanians repaid anything.
Borrowing by Romanians has doubled to £1.25 billion in five years, while borrowing by Polish nationals has barely changed, The Telegraph reported.
This is not right, not fair, and not sustainable.
Mr O'Brien estimates taxpayers could lose between £1.2 billion and £2.2 billion a year on these loans. Separately, around 50,000 overseas borrowers classed as non-compliant already owe £1.5 billion, with Cypriot borrowers alone owing over £300 million. The Student Loans Company recovered just £7.7 million from overseas non-compliant borrowers in 2024-25.
Every pound of that £4 billion that never comes back lands on taxpayers, through higher taxes now or more government borrowing later, paid by millions who never set foot in a university.
Franchised colleges under the spotlight
More than two-thirds of students on franchised courses come from countries where English is not the first language, with Romanians 'highly represented', according to the Office for Students, the publicly funded regulator. Then education secretary Bridget Phillipson admitted earlier this year that a 'disproportionate' number of Romanians were receiving loans and promised a crackdown on franchised colleges.
Meanwhile, British graduates repay 9% of their income above a set threshold. More than 120 MPs and peers wrote to the chancellor this week demanding an urgent review of those terms. The letter was co-ordinated by Rethink Repayment, a campaign group founded in 2025 by economics teacher Oliver Gardner.
At the same time, the government is negotiating with Brussels to let EU students pay lower fees than other foreign citizens as part of its reset with the bloc.
A Department for Education spokesperson said nobody living outside the UK can apply for a loan, and that 'anyone leaving the UK must continue to repay what they owe'. The department said it is closing loopholes and 'preventing misuse of the system'.
