David Willetts

Responding to the news that up to 175,000 students have begun the university term without the loans and grants they’re entitled to, after the Government’s system of financial support for students this year went into meltdown, Shadow Universities and Skills Secretary, David Willetts said:

“Ministers need to answer for this year’s chaos surrounding student loans payments. We were told three weeks ago that 50,000 students were affected but now we learn that it could be three times as many or even more. Tens of thousands of students could be beginning their university days in hardship because of the Government’s failure to run the system properly.

“The Government is ultimately in charge of the student loans system and senior officials were present at all the meetings where problems were discussed, so ministers cannot duck their responsibility for this year’s problems.”

Notes to editors

On 17th September, the Student Loans Company (SLC) said that despite large backlogs in processing loan applications, only 50,000 students would have to start university without all the grants and loans they expected. The SLC pledged that anyone who had applied for a loan before mid-August would receive a basic level of funding within a few days of starting their courses, and the full amount by the end of October. SLC chief executive Ralph Seymour-Jackson said: “students … worry they won’t get their money on time, but they will”.

Today, it has been revealed that up to 175,000 students may still be waiting to receive loans and grants, a week after most university courses started. Documents released under Freedom of Information requests have revealed sixteen per cent of the one million students who applied for funding this year have not yet received any loans or grants. http://news.bbc.co.uk/1/hi/education/8296618.stm

Previous Freedom of Information requests have revealed that the Government knew about serious problems in the student loans system more than a year ago, but Ministers failed to address them. In July 2008, the SLC’s Board was warned that 40 per cent of phone calls from students would go unanswered and that there were three times as many emails being received as it was possible to deal with. They were subsequently told that a lack of call centre capacity meant 250,000 phone calls had gone unanswered in just three months. But despite these problems, in November 2008 the SLC adopted an official ‘avoidable contact’ policy, cutting the amount of time staff spent on the phone to students in order to cut costs. In January 2009, a senior official the universities department was warned about the high number of phone calls going unanswered but instructed the SLC to cut costs further.

(Board meeting minutes available at

http://www.slc.co.uk/pdf/Operational%20Delivery%20Board%20Minutes%20-%2015th%20July%202008.pdf;

http://www.slc.co.uk/pdf/FOI%20Main%20Board%20Minutes%20-%2025th%20November%202008%20(KBP).pdf and

http://www.slc.co.uk/pdf/A.3%20FOI%20Main%20Board%20Minutes%20-%2027th%20January%202009%20(JG).pdf

Last year, the SLC switched its helpline from an 0800 to an 0845 number. Each call costs up to 40p per minute from a mobile phone, and students reportedly have faced high phone bills even when their calls to the SLC have gone unanswered. 0845 numbers are commonly used for ‘revenue sharing’ - money from the call can be paid to the recipient so they can cover their costs or even make a profit. Government guidance explicitly recommends that public bodies should not use such numbers: “Ofcom continues to recommend that public bodies should not use NTS numbers exclusively (ie: without giving equal prominence to a geographic alternative) especially when dealing with people on low incomes or other vulnerable groups.”

http://www.ofcom.org.uk/media/news/2006/04/nr_20060419