Fraud experts are investigating suspicions that thousands of students are fraudulently claiming hundreds of millions of pounds in student loans with no intention of studying or repaying the money.
The Education Secretary, Bridget Phillipson, has directed the Public Sector Fraud Authority to take action immediately to address this “growing threat” and support ongoing investigations.
This follows an investigation by the Sunday Times which revealed that students without academic intentions are enrolling in degree courses to access substantial loans without any plans to pay them back.
For the 2025-26 academic year, students can apply for tuition fee and maintenance loans of up to £25,440.
The loans are repayable once the student leaves university and their income reaches a certain threshold, which starts at around £25,000 a year. The debt is forgiven if not repaid within 40 years.
Education Secretary Bridget Phillipson has called for the investigation. Pic: PA
In her article for the newspaper, Ms Phillipson described the potential fraud as a major financial scandal facing universities. Most of the suspected incidents are reportedly at franchised universities, and there are concerns about organized recruitment of Romanian nationals.
The investigation was prompted by suspicious applications involving fake documents identified by the Student Loans Company.
‘Not enough care taken to join the dots’
Ms Phillipson emphasized the need for immediate action to address the integrity issues in higher education, stressing the importance of stopping widespread abuse across the system. She committed to introducing new legislation to empower the Office for Students to intervene swiftly and effectively in protecting public funds.
Please use Chrome browser for a more accessible video player
What to expect from the spring statement
A Department for Education spokesperson vowed to safeguard public funds and address any misuse or fraud related to student loans, emphasizing the government’s commitment to restoring trust in universities through the Plan for Change initiative.
The government intends to crack down on fraudulent operators and enhance regulation to protect taxpayers’ money. Meanwhile, immediate actions have been taken to address franchising issues.
Read more:
Civil service to cut 10,000 jobs
The Plan for Change explained
If misuse or fraud is uncovered, the government has the authority to recover payments and will introduce strict laws to prevent further abuse of the system. Susan Lapworth, the chief executive of the OfS, condemned the misuse of public funds and exploitation of genuine students, pledging to take action against such unethical practices.