Inquiry launched into student loans crisis

Higher Education minister David Lammy has ordered an inquiry of the Student Loans Company (SLC) after thousands of students across the UK were forced to start university without having received their loans.

Mr Lammy has asked Sir Deian Hopkin, former vice-chancellor of London South Bank University, and Bernadette Kenny, the director general of Personal Tax for HM Revenue and Customs, to undertake the inquiry to find the reasons behind the loans crisis.

In response to the announcement of the inquiry, Wes Streeting, president of the National Union of Students, said: “I am relieved that Sir Deian Hopkin and Bernadette Kenny have been appointed to cast an independent eye on the investigation into what has gone so spectacularly wrong with the payment of students' grants and loans this summer”

Mr Streeting added: “I hope that this review will lead to a full and frank analysis of this shambles and that the management of the SLC will be held to account for a fiasco that has left hundreds of thousands affected by late payments, lost documentation and a miserable start to their first term at university."

News of the independent inquiry came just days after the SLC released figures from the week ending on 11 October, which indicated that of 1,104,500 applications for a loan, 940,000 have been approved.

The problem has coincided with the first year that the SLC has taken on the responsibility of assessing all student loans applied for by first year English undergraduates through their service, Student Finance England.

Previously, this was undertaken at a local authority level. In Scotland, loans are processed by the Student Awards Agency for Scotland but still financed by the SLC.

SAAS reports that it is “currently processing almost all applications within target, where those applications are correct and complete”.

SLC chief executive, Ralph Seymour-Jackson, has apologized for the difficulties that students who do not have their loans are facing: “We are very sorry that students have experienced difficulties with their
funding this year and for the worry that this has caused them and their families.”

He also acknowledged that, in part, the problems in processing student loans this year have arisen from technical problems that caused many documents to be mislaid.

They are also the result of under staffing in the face of a 16 per cent increase in the number of loans being applied for this academic year.

Mr Seymour-Jackson said: “The inquiry has been announced to ensure that next year we can deliver the service that students and their parents have every right to expect.”

He provided assurances that his company was “working flat out to process all valid applications as we appreciate that students need their money as soon as possible during tough economic times.”

Mr Seymour-Jackson added: “Students who have sent their application and correct evidence by mid-August and have received an initial non-means tested assessment will receive their full entitlement by the end of October.”

Although Mr Seymour-Jackson did not deny technical problems concerning the scanning of sensitive documents and under staffing, he maintains that, “the number [of loans] being processed is normal for this time of year”.

His statement is supported by last year's processing figures, where 86 per cent of applications had been processed by 4 October 2008, in comparison to 84 per cent on 4 October this year.