Fishing, with Neil O’Brien

Neil O’Brien has something of a history in asking parliamentary questions in order to gather data. This time, he’s gotten himself a spreadsheet breaking down the number of non-compliant earners by year of first loan and nationality

In the terminology of the Student Loans Company, a borrower is “non-compliant” when the SLC does not have sufficient details about a graduate in order to collect repayments.

SLC can and will find you if you pay any kind of tax on earnings or income in the UK, or if you claim benefits. But it is recommended that if you are a graduate working overseas and have a student loan you tell SLC where you are working. If you don’t do this, your account goes into arrears. This is not a thing you want to have happen.

“Arrears” means that rather than using a calculation based on your earnings, SLC applies a fixed monthly repayment demand based on an estimate of your income – usually quite a high estimate. Interest is also added. On your return to the UK tax system, you become liable for the entirety of these payments, which is often rather a shock: you need to be able to demonstrate what your actual income was in each qualifying year to have this amount reduced.

Even before you return, SLC could track you down using a debt collection agency or legal action. To be clear, as of 2024 SLC never taken legal action over arrears, though there is nothing to suggest that this historic pattern will continue. SLC does use a debt collection agency to recover loans from those living overseas, but does not “sell” the debt to this agency.

Here’s Neil’s data:

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The vast majority of non-compliant graduates have a UK nationality. This never dips below seven in ten, and for the early years of plan 2 (the cohort now in their 30s who are making substantial repayments) it is nearer nine in ten. To be clear, we are not talking about a vast number of graduates – we’ve never gone much beyond 5,000 in total for a cohort (this based on more than 1,300,000 applying for loans each year).

It is possible to take out a student loan as a non-national if you have indefinite leave to remain or settled status, and if you live in England and have done so for three continuous years before the first day of the academic year you apply for.

Rupert Lowe, the Restore Party’s only Westminster MP, recently tried a similar trick in asking for the number of loans issued to non-nationals. This told us, for example, a little over 40,000 students with a Romanian nationality (most of whom will have been granted ILR via the post-Brexit measures aimed at EU nationals who were living and working in the UK) claimed loans in 2020-21. Of this cohort, 196 are in non-compliance.