Serious problems with student loans system

Shadow Universities and Skills Secretary, David Willetts, has today written to Lord Mandelson to seek assurances about reports that the student loans system is experiencing serious problems with processing applications.

Just weeks before the first payments are due to be made, many potential students have written to express their concern about inaccurate information, loss of documents and an unresponsive helpline.

These problems are reminiscent of recent Government fiascos over Educational Maintenance Allowance (EMA) payments and national curriculum tests.

The text of the letter is below:

"Dear Peter

I am concerned about the serious problems prospective students are facing in sorting out their financial support before starting university this month. I am receiving letters and emails on a daily basis from students and their parents who are finding it hard to obtain accurate information about their student support applications. The Government set up new arrangements for this year, including replacing Student Finance Direct with Student Finance England, and these do not appear to be working properly. There is a clear and substantial risk that new students will face serious financial problems at the start of the new university term.

Among the problems that people are experiencing are:

• a lack of useful information on basic facts like whether an application has started to be processed;
• insufficient information about the receipt and location of original personal documents;
• repeated website failures and no response from the helpline; and
• an absence of accurate information on their financial entitlement.

Because students need a financial settlement letter in order to start university, the problems look set to affect their ability to enrol at university as well as their financial situation. And those from less well-off households are affected worst of all, as they are entitled to income-related grants alongside the student loans.

Are you aware of these problems? What steps are you taking to tackle them? And are you able to reassure all young people starting university this autumn who applied before the deadline that they will receive their full loan and grant entitlement at the start of the new term?"