Page last updated at 16:55 GMT, Friday, 9 October 2009 17:55 UK

Tories warn student loan minister

By Gary Eason
BBC News website education editor

students queuing
Universities have had to dip into their hardship funds

The Conservatives say tens of thousands of students may be starting university in hardship because the government has failed to tackle finance problems.

The Student Loans Company (SLC) has given the BBC figures suggesting that at least 175,000 applications in the UK have not been processed.

Tory spokesman David Willetts said this was far worse than previously revealed.

But the SLC says most of those people did not complete their applications and only 50,000 are now outstanding.

It is believed the vast majority of those affected are students from England, though they may be at universities elsewhere around the UK.

This is because the main problems have been at Student Finance England, a subsidiary of the SLC, which has been processing applications for the first time.

Previously they were handled by local authorities then passed on to the SLC for payment.

'Duck responsibility'

Mr Willetts, the shadow universities and skills secretary, said: "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."

But the deputy chief executive of the SLC, Derek Ross, said on Friday that two thirds of the outstanding applications had been withdrawn or not completed.

"We are only dealing with 50,000," he told BBC 1Xtra.

He said 100,000 had been received only in the last four weeks and they were still arriving at the rate of 3,000 a day.

"Our staff are working extremely hard to make sure these students are paid."

Mr Ross said: "The information we have is that everyone who applied on time has been paid on time."

This contradicts what students and their parents are reporting in e-mails to the BBC News website.

Technical problems

The SLC has sometimes only given updates on numbers when Freedom of Information Act requests are submitted, delaying a response for weeks.

In response to one of these, it has now revealed that as of 4 October, of the record one million students who had applied for funding this year 16% had not received any loans or grants.

First-time applicants had been hardest hit, with just 72% of applications dealt with.

The Student Loans Company blamed this on late applications, in part, and on technical problems.

It had trouble with its system for scanning applications and had to revert to manual processing.

England's Higher Education Minister, David Lammy, is said to have been taking a close interest in the fiasco.

He held a meeting with the Student Loans Company on Thursday.

A spokeswoman for his department said: "David Lammy has expressed his disappointment to the SLC over the reports of delays in students' financial support.

"The SLC has apologised publicly for these problems and has assured the public and the minister 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."

Universities have become more vocal in complaining that they are having to help students with hardship loans in far greater numbers than last year.

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