EU students now owe the UK more than £5billion in outstanding university loans, figures show.

The latest data published by the Student Loans Company reveals the total amount of student debt by EU nationals in the UK has risen sharply over the past decade.

In 2013-14, EU borrowers owed just £0.7billion, but by the end of the 2024-25 financial year, this figure had climbed to £5.8billion.

From 2021/2020 onwards, following Brexit, new EU students starting university in Britain without settled or pre-settled status under immigration rules cannot receive tuition fee loans or grants from the Government.

Those who were already enrolled at a university however can continue to receive financial support for the duration of their course.

Experts have warned recovering these debts could present challenges.

Graduates in the UK most often automatically pay back their student loans through deductions from their salary, while overseas students arrange repayments based on their earnings.

Nick Hillman, director of independent think tank the Higher Education Policy Institute, told The Telegraph: “It’s a legal contract, so you still have to pay it back, but it is quite hard to get that money back.

“The student loan company can enforce that, but it’s very expensive.”

The Student Loans Company told the newspaper most overseas students met the terms and conditions to pay back their loans and those who did not would be contacted.

The Government this week announced it would rejoin the EU’s Erasmus student exchange scheme, costing around £570million for one year of membership.

EU relations minister Nick Thomas-Symonds said the breakthrough “is a huge win for our young people”, who will be able to study, train or gain work experience under the EU scheme from January 2027.

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Work on the UK joining the Erasmus programme was announced as part of Sir Keir Starmer’s post-Brexit reset deal with Brussels in May.

The UK left the scheme under Boris Johnson, who argued it did not offer value for money.

The Cabinet Office said the UK has now negotiated financial terms that “strike a fair balance between our contribution and the benefits the programme offers”, including a 30 per cent discount compared to what it would have paid under its post-Brexit trade agreement for the first year.

Downing Street insisted it is “a good deal”, while declining to deny reports the UK had pushed for a larger reduction in fees, saying only that negotiators, “as with every area of international engagement, pushed for the best deal for the British people”.

Tory shadow Foreign Secretary Dame Priti Patel has however accused ministers of “throwing away billions of pounds of hard-pressed taxpayers’ money on rejoining Erasmus” as they “continue to betray Brexit”.

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