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Non repayment of student loans to become a criminal offence

Graduates who fail to repay their student loans on time could be prosecuted, the universities minister has announced. Jo Johnson has announced that the government will have “zero tolerance” for anyone found to be deliberately avoiding repayments of their student debt. It is also working to improve its information on ex-students now living and working abroad.

The news comes after the government recently scrapped maintenance grants for poorer students, raising the total possible student loan to £8,200. Universities are also set to take on a record number of students this year, meaning the amount of money lent to students will be higher than ever before.

[su_pullquote]£8.3 billion is the amount currently owed to the government by graduates who have fallen behind with loan repayments[/su_pullquote]The Department for Business, Innovation and Skills (BIS) estimates that £8.3bn is currently owed by people who have fallen behind on their student loan repayments, making up over 10% of total student loans. £457m is said to be missing from people now living abroad.

Under the current system, former students employed in the UK automatically have money owed on their student loan deducted from their monthly salary along with tax. Those who work abroad, and who are self-employed, must themselves make their payments to the Student Loans Company (SLC).

The SLC have identified Australia as the country with the largest number of ex-UK students who are not repaying their student loans. The UK and Australian governments are set to co-operate in an attempt to solve the issue, sharing data on graduates from each country living in the other in an attempt to improve the collection of student debt.

In a written statement to the Commons, universities minister Jo Johnson stated: “As more loans are issued to new students each year, it is vital the repayment process is robust, convenient for borrowers, and working efficiently to ensure the sustainability of the student finance system, and value for money, for the taxpayer”.

He continued: “We will act to recover loan repayments where it is clear borrowers are seeking to avoid repayment, consider the use of sanctions against borrowers who breach loan repayment terms and, if necessary, prosecute”. However, Mr Johnson did acknowledge that the vast majority of borrowers are making their loan repayments on time.

Students who took out loans after 2012 must begin to repay their loan when their annual salary reaches £21,000. If their earnings drop below that amount then their payments cease until their wage rises above it.


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May 2022
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