Most suspected fraudulent activities are occurring at 'franchised' universities, which are colleges that offer courses on behalf of established institutions, raising questions about enrollment standards.

Last year, between 35% and 55% of applicants at some franchised universities were Romanian, prompting concerns about language proficiency and the integrity of the enrollment process.

In response to these issues, Phillipson plans to introduce new legislation to empower the Office for Students (OfS) with stronger intervention capabilities to combat fraud effectively.

Concerns have been raised about organized recruitment efforts, especially among Romanian nationals, who are reportedly using social media platforms like TikTok to share advice on accessing student loans.

Susan Lapworth, the chief executive of the OfS, condemned the alleged fraudulent practices as unacceptable, emphasizing their detrimental impact on genuine students seeking education.

The inquiry will be coordinated by the Public Sector Fraud Authority, which is already investigating reports that thousands of students are enrolling in degree courses primarily to secure financial aid.

The Student Loans Company has previously blocked payments amidst concerns of misuse, demonstrating proactive measures against potential fraud.

A spokesperson for the Department for Education reiterated the commitment to safeguarding public funds and announced plans to enhance regulations to prevent fraud within the system.

Phillipson criticized the previous Conservative government for ignoring warnings about the risk of fraud, similar to their inaction regarding Covid-related fraud.

Education Secretary Bridget Phillipson has initiated an inquiry into allegations of fraud within the university loans system, particularly focusing on claims that students are fraudulently obtaining loans without genuine intent to study.

The Student Loans Company has identified 3,563 suspicious loan applications in the 2022-23 period, amounting to nearly £60 million in potential fraud.

Phillipson has characterized the situation as one of the biggest financial scandals in the history of the university sector, stressing the urgent need to protect taxpayers' money.