Undergraduates warned of new student loan delays

Students have been warned they may not receive their full loans in time for the start of the new university term, as the body responsible for awarding funds is hit by administrative problems for a second successive year.
Just 12 months after hundreds of thousands of undergraduates were left without money for rent and books following the collapse of the student loan system, there are fears of a new wave of problems.

People applying for loans and grants have reported weeks of delays as the Student Loans Company (SLC) deals with a backlog of forms, fuelled by a record number of university applications.

Many students have complained that documents they sent to support their application have been lost or mislaid, raising the prospect that their funds will not be approved by the time they enrol in September.

The SLC have insisted there would be no repeat of last year’s fiasco, but conceded that it faced an “uncomfortable” few weeks after A Level results are published next Thursday.

Tens of thousands of teenagers who delayed applying until receiving their grades may find they struggle to get their funding requests processed by the start of the academic year.

The SLC is sufficiently concerned to have created a new scheme that will allow students who fail to provide all the necessary documents by the start of term to receive three-quarters of their maintenance grant anyway

The National Audit Office (NAO) has warned there is a “substantial risk” that some students will face delays similar to those of 2009.

A spokesman for the University and College Union, which reprsents lecturers, said renewed problems would be “deeply embarrassing” for the SLC, while the National National Union of Student warned of the “catastrophic” consequences for students.

By the start of the 2009 academic year the quango had processed just 43 per cent of applications. This year, 63 per cent of applications have already been approved. Of those outstanding, 103,000 require further information to be supplied by the student, while 37,000 are classified as “works in progress”.

David Willetts, the universities minister, said: “The government has made clear that a repeat of last year’s performance is unacceptable. My department and I are close in contact with the Student Loans Company and continue to monitor processing over the busy summer period.

“A new senior management team is in place and is overseeing improvements to the service. This includes putting more staff on processing and on the phones and improved information and services on the website.”

The SLC expects to receive a total of 840,000 funding applications this year, although some will only be submitted after the start of term. The number of people applying to university for the first time is expected to be 16.5 per cent up on last year – representing an extra 80,000 applicants.

Last year’s problems stemmed from bureaucratic changes which saw the SLC take over responsibility for administering student grants from local education authorities. Previously, the SLC had dealt solely with loans.

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