Tweet
The government has ordered a crackdown on fraudulent grant claims amid concerns that some students are fiddling their applications to qualify for thousands of pounds in grants.
The Student Loans Company (SLC) is reviewing the application process and has set up a pilot system to identify fraud in 11 areas of the country. There are separate concerns that a loophole is allowing the children of wealthy non-domiciled British citizens to qualify for grants worth thousands of pounds.
Students under the age of 25 are assessed on their family incomes at their home address. If the family's income is based abroad but the children are domiciled in the UK, they could be eligible for grants.
The National Union of Students said the loophole was shocking but insisted it did not believe the loan company's review would identify mass fraud.
The inquiry was announced in this week's pre-budget report, which said: "The Student Loans Company, working with Dius [the Department for Innovation, Universities and Skills], is undertaking a review to establish the extent of income-related fraud within the student support system, with a particular focus on fraudulent grant claims.
"Depending on the outcome, Dius will work with the SLC to implement measures to reduce the level of fraud and ensure that financial support to students goes only to those that are genuinely entitled to it."
A spokesman for the department said that a pilot project in 11 areas of England was looking at tightening up the applications process, in anticipation of the company's move to take over assessments for the entire student finance system.
The SLC said grant officers were conducting spot checks on applications to ensure that students had not lied about any aspect, such as failing to declare one of their household incomes.
The department's spokesman added that it was "possible" that non-doms could qualify for grants but it was not believed that fraud was widespread.
The Treasury says about 116,000 residents have non-dom status - meaning they live in the UK but do not pay tax on earnings made abroad. About 50,000 of those have no taxable UK income, meaning all their earnings are abroad and their children could potentially qualify for grants. Non-doms include tycoons such as Lakshmi Mittal, but most work for City banks, private equity companies and hedge funds.
Student grants are worth £2,825 a year to those from households earning less than £25,000 a year.
Wes Streeting, president of the National Union of Students, said: "I hope this isn't the solution to the government's spending worries because I'd be very surprised to see mass fraud on student loans. Obviously we think it's important the money reaches those who need it. I would be astonished if there was evidence of widespread fraud in the system.
"We need to look very carefully at the issue of non-dom entitlement to make sure it's British taxpayers' money well spent. They use the non-dom status for mass tax evasion.
"The idea that they could abuse their status to have a cheaper ride in the UK university system too is shocking. It needs to be addressed."
guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
