Loans delay irks student union

Student leaders are demanding a review of the new loans system as the latest figures show that one in seven undergraduates is still awaiting payment.

The National Union of Students is to ask the Student Loans Company, local authorities and the government to review the assessment and payment system after a series of problems caused payment delays this year.

Some 50,000 students are still awaiting payment. Almost 500 cheques have been stopped after they were collected and in 16 of these cases there was a delay in replacing the original cheque. At least two students have been issued cheques for nothing.

An NUS spokesman said: "Those universities and colleges that started term early, in other words the post-92 universities and higher education institutes, tend to have had the biggest problems. Unfortunately, these also tend to be places where students are hardest up to begin with.

"Certainly the SLC needs to look at whether it learned the lessons from last year. We have some sympathy for the SLC but basically it is their job to get the loan payments out on time."

He suggested that the loans system could be more streamlined, as it is in Scotland. While English students must apply through their local authorities, Scottish students apply through the central Student Awards Agency. The agency then forwards all the relevant information to the SLC which makes the payments.

The SLC received more than 350,000 loan requests from students this year and has so far issued 300,000 loan cheques.

Most of the outstanding payments are due to late applications but problems with the introduction of a computer program, which was designed to process applications made under the new expanded loans system, contributed to the difficulties.

A fast-track system for providing students with the 75 per cent of the loan that is not means-tested has caused problems for some students.

Under instruction from local education authorities, the SLC has cancelled cheques in order to replace them with cheques including the means-tested proportion. However some students have experienced delays as replacement cheques were issued.

A spokeswoman for the Department for Education and Employment, on behalf of the SLC, said: "We believe that this year's new system has proved successful in getting cheques to students early. We have overcome the teething problems in some local education authorities in July and we believe the system is now firmly bedded in for next year. As with all systems, though, we will be looking at what, if any, improvements can be made."

Last month, the DFEE Student Support Design Group started to discuss improvements that will be needed to the administrative systems for 2000-01, including a redesign of the computer software provided by the SLC for the collection of courses and terms data from universities.

At Luton University as many as 850 students, more than a third of all first-years, were still awaiting loan cheques.

A university spokeswoman said that delays were not uncommon because many students are recruited through clearing and apply late for loans. But she said that this year was worse.

But at other institutions delays seem to have been minimal. The University of North London, for example, reports a small minority of students awaiting payment. A spokeswoman said that those left out of pocket were encouraged to apply for Pounds 400 access funds to help tide them over.

The Commons education subcommittee may investigate the loans system as part of its inquiry into higher education, due to start next year.