More than £50 million of tuition fee loans to European Union (EU) graduates have not been repaid over the last five years, figures have shown.
Private investigators have been hired by the Student Loans Company (SLC) to track down the hundreds of overseas graduates from UK universities who have gone off the radar. More than £15 million of loans for graduates from Cyprus are not being repaid.
The SLC lacks information for where some European graduates are living, as well as whether they are working, for loans totalling £41 million, according to a reply to an Independent on Sunday freedom of information request.
Kevin O'Connor, head of SLC repayment, said they were using "international trace agents" to track missing borrowers.
Mr O'Connor said: "Customers with student loans who move abroad must inform the Student Loans Company. If they do not, we trace borrowers using international trace agents and can charge additional penalties which can be added to their loan balance and commence legal action to recover the full balance.
"We are currently in the process of reviewing accounts of both UK and EU borrowers who are known to reside overseas and are in arrears, with a view to issuing further legal proceedings against those who do not respond to us."
The SLC appointed a UK-based tracing agency for overseas traces and collection in January 2010.
Tuition fees for students in England and Wales are now capped £9,000 a year.
Conservative MP Andrew Percy told the Independent on Sunday: "With British students paying more in tuition than ever before, many people will not understand how it is possible that foreign students from the EU are able to turn up to the UK, run up taxpayer-backed debts and then leave."
A spokesman for the Department for Business, Innovation and Skills said: "The overwhelming majority of overseas borrowers are honest and want to repay the loans they have received. However all borrowers need to know that they cannot evade their obligation to repay simply by moving overseas. We actively trace those in arrears and will obtain court orders in other jurisdictions to require repayment if necessary."