The Government is to spend millions of pounds on fees for students from mainland Europe who will compete with British teenagers for places at top universities, it was disclosed last night.
While their British counterparts get deeper into debt, EU students will be lent money that officials privately admit will never be repaid.
After September next year, when £3,000 top-up fees are introduced, the Government will pay fees to universities on students' behalf.
British graduates will have to repay the debt once their earnings reach £15,000 a year, but there will be no such obligation on those from countries such as France, Germany, Finland and Poland.
Under European law each member state must treat students from other EU countries the same as their indigenous population. But the Department for Education admitted that efforts to persuade other states to help it recoup top-up fees have failed.
The cost of chasing money across the Continent will fall on the Student Loan Company, which is funded by the taxpayer. The company admitted yesterday that it will be reliant on the goodwill of the EU students, who will be "asked" to notify it when their earnings reach £15,000 and it will only be able to force repayment if they return to work in Britain.
The high reputation of British universities and the popularity of the English language has already made the country by far the biggest importer of European students.
There are around 40,000 undergraduates from other EU countries on three- or four-year courses - the equivalent of three medium sized universities.
The number of EU students accepted here last year rose by 24.4 per cent to 12,068 and applications for this September are up by 53 per cent, from 9,926 to 15,187, largely because of the 10 countries that joined the EU last year.
Barry Sheerman, a former chairman of the Commons education select committee, wants the European Commission to set up a system for countries to pay up front for their students and take responsibility for collecting the debt.
The Department for Education said the Student Loans Company had well established mechanisms to recover loans from students.
"Working with the SLC, we will continue to ensure that these processes are sufficiently robust for repayments due from EU students and that from
2006-07 the system has the capacity to effectively administer repayment of tuition fee loans."
The SLC issued a statement saying: "The mechanism for collecting repayments will, in broad terms, require the borrower to declare their total annual income to SLC, which will calculate the repayment due.
"If the borrower does not meet these obligations, a penalty may be imposed where a default amount of a monthly repayment is applied to any overseas borrower who fails to provide the information required by SLC.
"The default amount initially is £246 per month.
"The percentage of borrowers working abroad and therefore outside the tax system is very low.
"Most will return to the UK at some time in the future, when deductions can be taken directly from their salary at nine per cent of any income over the threshold, until the loan is paid off."
Foreign students 'will evade millions in university fees'
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Originally Posted by BDC
Or syphon money off into a special account and then declare yourself bankrupt 
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