The Minister for Universities and Science (Mr David Willetts)
In November 2013, I announced to the House of Commons that we suspected a number of Bulgarian and Romanian students studying at alternative providers may have been claiming maintenance support without meeting the requirement that they have been resident in the UK for at least three years.
We then introduced more stringent evidence checks for all EU students studying in the UK applying for maintenance support and asked all EU students to supply additional information to support their applications, before any further public funding was made available to them or to their institutions. This means these students must have evidence, such as bank statements, utility bills, council tax records, payslips, and P60s, to support their residency claims.
The results of this exercise are now available. Of the 11,191 students who we asked for additional residency evidence, 1,333 (12%) received a payment but were either unable to or chose not to demonstrate that they had been in the UK for the three years prior to the start of their study.
Around £65 million was due to have been paid out to these individuals. As a result of our prompt action only £8 million was actually paid. We have taken immediate action to recover these sums and already have recovered around £2.5 million. Work continues to recover the rest including using debt collection agencies, court action, and if we find evidence of fraud, we may prosecute those involved.
If any higher education provider is found to have been complicit in this, we will take the action against them directly.
The decision to take this action and suspend payments to a large number of students is not one that we took lightly. I believe the results of the exercise fully vindicate our decision to take action. We have sought to limit the impact on genuine applicants. Where evidence has been provided to support a claim, payments have been reinstated.
We have put in place a range of measures to ensure this does not happen again.
More stringent residency evidence checks will remain in place for all new applications from EU students alongside checks for UK students. These require students to provide documentary evidence to support their claim to be resident in the UK.
Any student who has failed to provide the required evidence will not be able to receive student support in future years, until such time as they do provide that evidence.
We have asked other EU Governments to assist us in tracking down any of these students that have returned to their home countries without paying their outstanding debt. We are exploring how best to identify whether these students have returned to the UK.
In alignment with the Cabinet Office Fraud, Error and Debt Taskforce appointed by the Prime Minister, we will carry out a fraud and debt review which will look at: the resilience of the entire student finance system; how we respond to fraud; and the powers of the Department of Business Innovation and Skills, Student Loans Company and partners have to tackle fraud.
Some other EU countries require other nationals to be resident in their country for five years before they are eligible for the full package of student support. We will consult on whether student support in England should be made available on the same basis so as to ensure that scarce public funds go only to those who have a genuine attachment to the UK.
We have commissioned a sampling exercise to investigate whether similar issues exist at publicly funded higher education providers.
A full copy of the results of this exercise will be placed in the Libraries of the House.