Creditworthiness of the continental club

September 3, 2015

It is not difficult to see why student debt incurred by non-UK European Union nationals will cost the British taxpayer a lot of money (“Recruitment boom from Continent prompts warning over student finance”, News, 20 August).

Even if indebted students can be tracked after leaving the UK, in many European countries graduates may never earn enough to start repaying their loans. A free education in the UK is a bargain that students would be foolish to forgo. Universities know this perfectly well, and will take the money where and while they can. EU students are simply another income stream; and with no restrictions on recruitment, they are obviously an attractive market. University managers know a cash cow when they see one.

There is no point in raising the alarm about European students taking advantage of British taxpayers: their unpaid loans will be trivial compared with unredeemed UK debt. Since the UK’s universities get the tuition fee cash without any exposure to the risk of unpaid debt, their arguments for staying in the EU are understandable, all the more so when the rest of the European Commission funding that they can draw on is taken into account; however, dressing it up as some kind of international diversity benefit is stretching academic credibility and the taxpayers’ credulity too far.

Ultimately it will be for those taxpayers to decide whether it is value for money, but what has already been spent cannot be recovered by leaving the EU.

Michael J. H. Liversidge
Emeritus dean, Faculty of Arts
University of Bristol

The article about the growth in EU students seems to me to reflect undue concern about students from other EU countries not repaying their loans. One of the features of membership of the EU is that the judgments of the courts in one country are easily enforceable in another. If a former student doesn’t pay a debt, then a judgment could be obtained that the courts in the local country would be obliged to enforce. This could include a requirement for the defendant to pay legal costs both in the UK and in the local jurisdiction. A judgment for enforcement of payment of a bad debt would also go on a person’s credit record.

Of course there would be cases where people would just disappear to other parts of the world, but it is reasonable to assume that in most cases people will be traceable.

If the Student Loans Company had to seek repayment through the courts in a large number of cases, there could be substantial costs involved in managing it. However, I suspect that the majority of those who might be tempted to try to evade their responsibilities would not take the risk of being caught and would repay their debts.

It would, however, be wise to review the conditions of the loans as they affect both UK and other EU students who live abroad after finishing their studies. Perhaps, after a payment holiday, all graduates living abroad should be required to pay a fixed sum every year, regardless of income.

It would be wise for universities to argue for a tightening of the regulations and for sensible enforcement to head off Eurosceptics who would undoubtedly be happy for us to withdraw cross-border study privileges along with other aspects of EU membership.

John Kelly
Via email

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