University sorts out late loan mess


The University of Lincoln has helped students who havent been given their student loans yet. | Photo: Samuel Cox

Backlogs, missing forms, and general chaos engulfed the Student Loans Company (SLC) at the beginning of this academic year. There were over 170,000 applicants in mid-September who were still waiting for a reply to their requests for financial support.

Universities up and down the country were forced to bail out students who hadn’t received their loans at the start of term, as accommodation bills came pouring through letterboxes.

The University of Lincoln initiated a “commitment to pay” scheme, whereby hard-up students suffering from the backlog were given the equivalent of their loan, on the condition that they paid it back as soon as their loans came into their account.

Tuition fee collection by universities happens in February and May 2010, when the SLC releases the funds. Lincoln students who had suffered as a result of the problems were given until December 1st to provide documentation relating to tuition fees.

Tony Newboult, finance operations manager at the university, says: “Those students who use their SLC maintenance grant to fund their accommodation fees have been more affected, with 53 students not yet in a position to pay their first term’s fees. These are being dealt with by the Student Support Centre and are being given additional time to pay pending receipt of their grant.”

This is the first year that the government-run SLC has taken responsibility for processing applications from local authorities. The decision to centralise the handling of student loans was announced in 2006, with Bill Rammell, higher education minister at the time, claiming it would provide “clearer information, faster decisions, timely payments, and accurate repayments”.

The reality has been less rosy, as technical problems, late applications, and a rise in student numbers combined to cause this year’s problems. Important documentation relating to applications was reportedly also lost, which led to further delays for some students. There were over a million loan applications this year alone.

The recession was also blamed. The rise in loan applications was larger than the rise in student numbers, reflecting the economic downturn’s effect on many families across the UK. Higher education also offers a safeguard to the impact of the recession, which left many with little choice but to enrol on a degree course, having struggled to find work.

Critics of the SLC’s handling of student loans have slated the company for only employing 120 extra staff, despite a predicted surge in application numbers.

The SLC was criticised for a lack of sufficient preparation by Liberal Democrat MP Phil Willis, who sits on the Commons Innovation, Universities and Skills Committee, in an Early Day Motion submitted to parliament. The motion was signed by 81 MPs and demanded an “immediate inquiry into the operation of the Student Loans Company to prevent a reoccurrence in 2010.”

The SLC also came under fire following a freedom of information request by the Liberal Democrats. Figures released revealed that between 2008 and 2009, nearly £2m in bonuses were handed out to SLC staff.

Three bosses benefited from £21,000 lump sums, whilst two more were given £15,000, and a further five were handed £10,000.
Senior staff claimed £110,596.31 in expenses alone, whilst the total figure for staff expenses claims topped £1.2m.

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