Finance News

Up to 175,000 students still waiting for loans and grants

Up to 175,000 students are still waiting for their loans and grants a week after university courses started, it emerged today.

First year undergraduates have been worst hit – 28% of their applications for grants and loans have yet to be dealt with, data released under the Freedom of Information Act for the BBC revealed.

Universities said they were being forced to make "emergency payouts" to students unable to make ends meet and to stop some dropping out of courses.

Just over one in six of the record one million students who applied for funding this year have yet to receive their grants and loans.

This year is the first time that freshers have applied directly to the Student Loans Company (SLC), which is responsible for administering student loans. Previously, first year students applied through their local authority, which sent their details to SLC. Second, third and fourth year students still apply through their local authorities.

The SLC, which runs the student finance system on behalf of the government, blamed late applications and technical problems. It had intended to use new document scanning equipment, but it has had to abandon this and process information manually.

It insists that the "vast majority of students who applied on time will have received their money after they registered at university".

David Lammy, the higher education minister, held a meeting with the SLC yesterday to discover the scale of the problem and ensure the company understood the frustration the delays are causing.

Malcolm McVicar, vice-chancellor of the University of Central Lancashire, said: "The evidence we have is that the level of students who have not had any money is greater than in previous years. We have had to make a number of emergency payments – about 250 – at a cost of about £70,000. We need an assessment of the scale of the problem. Our students are facing serious problems. Many can't find out the status of their applications. They have bills to pay. Some have families that can help, but others do not."

Last month, Ralph Seymour-Jackson, the chief executive of the SLC, issued an "unreserved apology" to the 170,000 applicants who were struggling to confirm their funding and admitted that SLC had difficulties processing all the applications before the new term.

By 4 October, the SLC had had 1,091,653 applications for loan – of those 916,295 had been processed. At least 175,000 may not have been processed, although the SLC says this figure could include cancelled applications or those which have been started but not finished. Of the 487,179 applications from first-time applicants, 351,773 have been processed – 72%. Last year, 78% of first-years' applications and 86% of all applications had been processed.

A spokeswoman from the SLC said: "The variance between the applications that have been sent in and those that have been processed is due to a combination of factors, including late applications, of which we are still receiving thousands every day. We have now paid 750,000 students who have started their university courses. This compares well to the same time last year, when we had paid 743,000 students."

There has been a 16% rise in applications despite the fact that student numbers have increased by only 10%, something being put down to more people opting for loans in the recession.

More fortunate students are living a luxurious lifestyle of smoked salmon sandwiches, cappuccinos and iPods, according to a professor.

The typical student house is no longer like the fleapit portrayed in 1980s sitcom The Young Ones and more like an English version of Friends, Kevin Sharpe, professor of renaissance studies at Queen Mary, University of London, has told the Times Higher Education magazine.

He said today's "posh pads" were a far cry from his time at Oxford where in a student house he rented the carpets were "held together by accumulated grime" and the furnishings would not even have been accepted by the charity shop.

Date: 09.10.2009 [ID: 232]

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