Almost one in five student loans in UK handed to foreign nationals as critics warn British taxpayers could be left footing multi-billion-pound bill

Published: 00:58, 8 August 2026 | Updated: 01:07, 8 August 2026 Almost one in five student loans are being handed to foreign nationals, sparking fears British taxpayers could be left footing a multi-billion-pound bill for unpaid debt. New figures show non-British citizens received around £4billion in tuition fee and maintenance loans in the last academic year, accounting for nearly 20 per cent of all lending under the student finance system. The vast majority went to EU nationals who qualify under post-Brexit residency arrangements, with Romanians alone accounting for around one in every 20 first-time loans. Critics have warned that the growing number of loans issued to non-British citizens could leave taxpayers exposed, with overseas borrowers estimated to be around a quarter less likely to repay their debts than British graduates.  Figures show the Treasury could be forced to write off between £1.2billion and £2.2billion a year as a result. Under current rules, most international students are not eligible for UK student loans and are expected to fund their own tuition fees and living costs. However, exemptions exist for EU citizens and their relatives who secured rights under the post-Brexit settlement scheme.  Official figures show that of the 239,000 foreign nationals currently receiving student loans, around 195,000 have settled status. Figures compiled by Conservative MP Neil O'Brien show the number of student loans going to non-UK citizens has almost doubled over the past decade, rising from 10.2 per cent to 19.3 per cent. University graduates at the University of Birmingham. New figures show non-British citizens received around £4billion in tuition fee and maintenance loans in the last academic year Mr O'Brien has expressed concerns that the settled status scheme was continuing to expand years after the deadline had passed, citing Home Office data that shows more than 36,000 people were granted settled status in the past year, alongside a further 30,000 family members. 'In the past 12 months alone, around 66,000 completely new applicants gained residency via this scheme, five years after the deadline,' he told The Times. 'Why are the Home Office allowing these implausibly late claims, and on what basis are they still being granted?' The issue comes amid growing concern over people abusing student finance. Ministers have previously admitted that a disproportionate number of Romanian nationals were claiming student finance, as regulators have warned that some college courses may be vulnerable to misuse. The Department for Education insisted there are strict eligibility checks and said anyone who leaves the UK remains liable for repayments. A spokesman said: 'We have strict eligibility requirements for student loans. 'Nobody who lives outside the UK can apply for or receive a loan. Anyone leaving the UK must continue to repay what they owe. The Student Loans Company can take enforcement action and uses debt collection agencies. The public rightly expect these debts to be paid, and we are working with them to go further.' The spokesman added that the government was also 'cracking down on abuse of student finance at its source, closing loopholes in regulation and preventing misuse of the system'.