Sky News reports that, “Fraud experts are set to investigate suspicions
thousands of students are fraudulently claiming hundreds of millions of
pounds in student loans with no plans to study – or pay the money back.”
The news comes out after a Sunday Times investigation, which looked into
finance documents, company accounts and interviewed sources from the
Student Loans Company (SLC), the Department for Education, the Office for
Students (OfS) and university lecturers – according to university world
news.
The investigation reports that students are enrolling on degree courses
despite “absolutely no academic intent”, so that they can claim thousands
of pounds from loans and with “no intention” of repaying the money back.
Financial loss
When applying for university, one of the first steps is getting that
student finance application done as soon as possible. The gov.uk website
says, “If you’re a full-time student, you can get up to £9,535 (in loans.)
If you’re studying an accelerated degree course, you could get up to
£11,440.”
With students only having to pay back their loans once their income reaches
a certain threshold, starting at about £25,000 a year and getting written
off after 40 years, some never reach the stage where they have to pay it
off. Therefore, if this scandal is proven true, students applying for
student loans without the intention to ever study could be conning their way
into free earnings.
Education Secretary Bridget Phillipson says it is, “a hammer blow to the
integrity of higher education.”
Romanian involvement
The aftermath of the Sunday Times investigation also revealed the concern
of a potential “organised recruitment” of Romanian nationals to enrol on
courses.
Romania Insider
says, “Romanians are reportedly among those suspected of a massive fraud of
the student loan system in the United Kingdom.
“The alleged fraud, according to the report, could amount to hundreds of
millions of pounds.”
Sources suggest that lots of loan contracts have been taken out by
individuals identifying as Romanian citizens, but it is unsure whether
identity theft might also be involved.
The investigation did not target Romanian students specifically but instead
the franchised universities which have been called out instead, with at
least six providers identified for involvement in the fraudulent
“for-profit” scheme.
It is said that such ‘franchised’ universities are enrolling students that
do not speak English adequately. Romania Insider suggests that these
institutions are accepting screenshots of Duolingo tests as proof of
language proficiency and “at some universities with franchised providers,
between 35% and 55% of applicants last year were Romanian.”
These accusations have been confirmed by The Sunday Times which notes that
the loan requests and the enrolments “are conducted entirely online and are
hardly ever verified.”
Whilst identity theft may be at play, the facts provided by UK Government
figures reveal an alarming increase in the number of Romanian citizens
applying for student loans. Since 2015-16 the loans handed to Romanian
students have inclined from 5,000 to 84,000 in 2023-24, suggesting 15% of
the Romanian population in the UK to have received a student loan in the
past academic year.
Reformed student loan repayments
However, despite the scandal due to the alterations to student loan
settlements for new students, the number of future students paying back
their loan will increase, which could lessen the blow (at least for the
higher education system financial providers.)
The House of Commons Library says, “The Government forecasts that around
65% of full-time undergraduates starting in 2023/24 would repay them in
full. This is more than double the forecast for the 2022/23 cohort (27%)
because of reforms to student loan repayments for new students.”
The hit of a scandal
With the recent reports of higher education systems struggling due
to funding cuts,
this scandal could just prove to be another hit that will lead to more
universities making
cuts to staffing jobs
and courses.
