Student Claire Swinmurn: "I feel totally let down"
Up to 50,000 students in England face starting university this month without all the grants and loans they expected.
The Student Loans Company has struggled to cope with applications and says full payments will be made by late October.
But it now says everyone who applied on time should receive at least the "basic level" loan soon after courses start.
Students' leaders have reacted angrily. The Tories say there has been an "appalling administrative cock-up" and say ministers should "come clean".
Hundreds of students have e-mailed the BBC News website to complain of delays in the handling of their applications.
They complain of missing documents, help lines they try for hours to get through to, which then offer them no help.
Some of the e-mails are from people who said they applied on time but had not had their loans approved by the time they started courses this week.
The SLC, which organises the loans for the government, says the backlog has arisen because of an increase in loan applications and late applications.
Most English universities start on Monday 21 September or a week later, but some courses - such as teacher training - have already begun.
The chief executive of the Student Loans Company, Ralph Seymour-Jackson, told the BBC everyone who had applied for loans before mid-August would have their applications processed by the time they started their courses.
I have no idea whether I'm getting any money to live on when I leave for university in three days
All of those applicants would receive at least "basic funding" - that is, tuition fees for their university and the basic maintenance loan - within seven days of starting a course.
This means up to 50,000 students will not receive the full amount they could expect from the Student Loans Company, although the balance would follow by mid to late October.
Fifty thousand is 5% of the million students who have applied for loans this year.
Most affected will be those on the lowest family incomes, because above the basic level of a maintenance loan (which all full-time undergraduates are eligible for) is an additional means-tested element and the processing of those requests is to be done second.
Those eligible for other extra support, such as loans for child care will also be affected as these are means-tested.
Mr Seymour-Jackson appeared on BBC Breakfast News with Claire Swinmurn, who had contacted the BBC News website because her funding and loans for her teacher training course had not come through. She started her course at Oxford Brookes University nearly two weeks ago.
She had written that she was sick to her stomach "as I am petrified that I will have to give up my course due to the delays caused by student finance".
We admit the situation is not perfect, but it's reasonable
Ralph Seymour-Jackson, Student Loans Company
She had applied in February and was relying on a childcare grant to cover the cost of her children's nursery places.
Mr Seymour-Jackson apologised for the delays and told Claire Swinmurn her funding should arrive in her bank account by the weekend. However, she said she understood that this money would not include her childcare grants.
He said the issue was not about processing applications but a "telephone issue".
"It is genuinely very difficult for students to get through on the telephone so they worry they won't get their money on time, but they will," he said.
The decision had been taken to process all students for a "basic level" of funding so that everyone had some money to start their courses.
"We admit the situation is not perfect, but it's reasonable," he said.
The Students Loan Company said some 100,000 payments have been made in the last two weeks, and a further 700,000 are due to be paid in the next two weeks.
Minutes of board meetings of the SLC published on its website show concerns were raised in January about a likely surge in applications and the ability of the phone service to cope.
This is an appalling administrative cock-up which will force many students into financial hardship just as they're beginning their studies
David Willetts, Conservative education spokesman
They indicate the body asked the government for extra funds to boost capacity and these were apparently given. Extra staff were recently taken on.
The National Union of Students president Wes Streeting said: "It is completely unacceptable for some of the poorest and most vulnerable students in the country to be left short of funds and it is particularly insulting for Ralph Seymour-Jackson to claim that this situation is 'reasonable'.
"Student Finance England has assured us time and again that significant backlogs would not be a problem, but now it is apparent that this is not the case."
James Greenhalgh, member of the Youth Parliament said: "Freshers week and the start of university should be an enjoyable and memorable experience for news students, who inevitably have enough to worry about, such as leaving home, coping with university life and whether the course is right for them without the added trauma of worrying about their finances".
The Conservatives are calling on ministers to explain what they knew about the problems and what they did to sort them out.
Tory universities spokesman David Willetts said: "This is an appalling administrative cock-up which will force many students into financial hardship just as they're beginning their studies."
He said it would be a tragedy if the government's failure led to students dropping out of university because they could not afford to support themselves.
"Ministers need to come clean about precisely when they first knew about the problems, what steps they took to sort them out and exactly how many students are going to be affected."
A spokeswoman for the Department for Business, Innovation & Skills said: "The government has been assured that more than three quarters of a million students have now had their application for funds approved and others are being processed as swiftly as possible.
"The SLC advises students and their families to check their application online before ringing in as many calls are then not necessary. The department is asking for regular updates on progress."
Universities have contingency plans, including hardship loans, to help students who arrive without funding.
Nicola Dandridge, the chief executive of the umbrella group Universities UK, said: "Universities have measures in place, such as the Access to Learning Fund, to support those students who face serious financial difficulties through no fault of their own."
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