60,000 more university places may mean more unpaid student loans

Repayments from EU students will be harder to collect, says think tank report

Already the 60,000 undergraduates at English universities from EU countries owe £690 million in outstanding debts (Getty Images)

Plans to remove all limits on student numbers are likely to lead to an influx of EU students to UK universities – making it even harder for the Government to recover student loans, according to a report from a widely respected higher education think tank out today.

The plan, which mean an extra 60,000 student places will be available at universities by 2015/6, is almost certain to lead to more EU students being recruited, says the Higher Education Policy Institute (HEPI) in a new pamphlet.

“When number controls are removed, there will be clearer incentives for institutions to recruit EU students,” says the report, “as a way of maintaining entry standards: increasing income: and mitigating the effect of demographic change.

“It therefore seems likely that enrolments from EU citizens will grow: UCAS data show a 12 per cent increase in placed applicants from the EU at the most selective institutions in 2014/15 and an eight per cent increase at lower tariff institutions.”

However, the report goes on to warn: “If this were to occur, the challenges in collecting loan repayments from people outside the UK will become more significant.”

Already the 60,000 undergraduates at English universities from EU countries owe £690 million in outstanding debts.

“The loans are subsidised by British taxpayers but have proved notoriously difficult to collect since the first full cohort of eligible EU students became liable for repayment in 2010,” the report goes on.

The report, written by Nick Hillman, HEPI’s director and a former special adviser to David Willetts – Universities Minister until the Government’s summer reshuffle, says the policy was “put together rapidly with little attention to precedents at home or abroad that might have served as a useful guide”. “It remains fuzzy,” the report adds,

It says that – as a result of concerns expressed by, among others, the prestigious Russell Group of universities, that quality could suffer as a result of the increase in recruitment – ministers are considering “backstops” to limit problems.

One could be a minimum academic entry bar of, say, two E’s at A-level for any recruit. Another could be restrictions on those universities with a higher drop-out rate.

The report also says there is a still a question mark over how alternative private providers are treated. They will this year face controls over recruitment for the first as a result of concerns about quality at some providers, However, these will only last a year with the Government saying they will receive “similar” treatment to publicly funded institutions.

“A critical outstanding question is how the policy is to be paid for,” said Mr Hillman. “The Government has recently out a quick sale of old student loans – which was the original source of funding.

“It is hard to square current forecasts on the future number of students with the expected cuts to public expenditure.”