Loans chaos rounds off rotten week for students

The news this morning that students are to face another year of chaos and delays in applying for grants and loans comes at the end of a terrible week for universities and students in which it was reported that:

• A quarter of students would leave university with debts of more than £20,000;

• The further education budget will be cut by £573 million – leaving up to 220,000 applicants without a place;

• Even 50,000 of the brightest sixth-formers would fail to land a place;

• The Chancellor of Oxford University said the cap on tuition fees should be lifted; and

• The Vice-Chancellor of Buckingham called for all state funding to be cut and universities to be privatised.

The latest chaos at the Student Loans Company, which has been severely criticised by the National Audit Office (NAO), left hundreds of thousands of students without funds at the beginning of term. The NAO report found that:

“The Company took 33 per cent longer to process applications in 2009-10 compared with local authorities in 2008-09, and only 46 per cent of new applications had been fully processed by the start of term. From February 2009, applications arrived more quickly than the Company could process them and, by September 2009, 241,000 applications had been received but not fully processed.

“This led to a dramatic increase in the volume of calls, with the Company receiving over four million in September – 87 per cent of which were unanswered. The Company had failed to communicate key messages to applicants that would have helped to reduce unnecessary calls. The customer service provided by the Company in 2009 was poor. Half the students responding to an NAO survey said they had to send in the same paperwork more than once, while 17 per cent said the Company had told them it had lost some of their documents.

“Overall, from February 2009 to January 2010 the Company answered fewer than half of the calls to its contact centre. The NAO has also raised concerns about the Company’s performance in managing Disabled Students’ Allowance. By the end of 2009, only 4,000 of 17,000 applications had resulted in a payment, taking an average of 20 weeks to be processed.”

Responding to the report, president of the National Union of Students (NUS) Wes Streeting told the BBC that the chief exec of the Student Loans Company would have his “head on the block” if vast improvements aren’t made for next year – and that the NUS would closely monitor their performance.

He said:

“We will hold him to account for that promise. Today he has put his head on the block. As to whether the axe will fall will depend on whether he keeps his promise.“

And, explaining the impact of the funding cut and any lifting of the cap on tuition fees, Sally Hunt, general secretary of the University and College Union, told Left Foot Forward:

“You cannot make cuts without serious consequences. After years of rightly encouraging people to go to university, the government is abandoning a generation who, instead of benefiting from education, will find themselves on the dole alongside sacked teaching staff. We believe the cuts could lead to thousands of jobs being lost and the staff who survive the cull left with more students to teach and less time to spend with them. Anyone who thinks this won’t massively impact on the quality of education in this country is living in a dream world.

“The consequences of the cuts will be building projects on hold, class sizes growing where jobs are lost, thousands of students denied access to university and staff following them to the dole queue. Other leading economies are investing money in universities in order to help economic growth and widen participation, yet our government seems intent on doing the opposite…

“A few years ago Lord Patten suggested parents shouldn’t begrudge a fees hike as they were already paying so much to put their kids through school. The vast majority of parents in this country do not pay school fees. Removing the cap on university fees might not make much difference to Lord Patten and his friends.

“However, for the vast majority of hard-working families in the country, higher fees would be a disaster. We would see the rich able to buy a place at whatever institution they please, whilst the rest scramble around for a place within budget. It is not difficult to work out what the motive is for Lord Patten and friends if fees rocket.”