Crackdown on student fraud claims

Maintenance grants for students are means-tested

A crackdown on fraudulent student grant claims has been ordered amid concerns some people are fiddling the government out of thousands of pounds a year.

The Student Loans Company is to carry out spot checks in 11 areas of England to establish the scale of the problem.

University students with an annual family income under £25,000 can claim grants of up to £2,825 a year.

The review of "income-related fraud in the student support system" was announced in the pre-Budget report.

It is hoped this will help establish the extent of fraud in the system.

'Prudent'

The report said: "Depending on the outcome, Dius [Department for Innovation, Universities and Skills] will work with the Student Loans Company to implement the measures to reduce the level of fraud and ensure that financial support to students goes only to those that are genuinely entitled to it."

Universities Secretary John Denham said: "The government is investing billions of taxpayers’ money into higher education, ensuring that anyone who can benefit from higher education has the opportunity to do so.

"That’s why I’ve asked for these spot checks as it is absolutely the right thing to do, and prudent, to continually check and improve the systems for ensuring the accuracy of information supplied to the Student Loans Company and preventing fraud from taking place.

"Those households asked to take part in the spot checks are not suspected of wrong-doing. No genuine applicant will have anything to fear, and no action will be taken if genuine errors have been made."

Lowered limit

A Dius spokesman said the Student Loans Company was due to take over the administration of the grants scheme in the near future from local authorities and was beginning with pilot schemes in 11 areas of England.

The fraud spot checks would be carried out as part of these transfer pilots, he said.

A spokesman for the Student Loans Company said: "The amount of financial support that a student can receive each year is largely dependent upon their household income and essentially the spot checks will seek to confirm that information supplied - regarding for example the number of people in a household who are earning - is neither over or under-declared to ensure the correct amounts of student finance are awarded.

"Fraud isn't believed to be a significant problem within the student finance system, however the outcome of this pilot scheme will reveal its true extent."

The announcement comes after Dius revealed a £200m funding shortfall in the student grants system because more youngsters than expected had qualified for the means-tested funds.

This led ministers to reduce the upper limit for receiving help from a family income of £60,000 to £50,020 from next year.

There is also concern that children of wealthy non-resident British citizens could qualify for student support because of a loophole in the system.

It is thought they might be eligible for grants because the family's income is based abroad and not at the domestic address at which income is counted for the purpose of the grants scheme.