Students who drop out during their first term at university will still receive the second instalment of their loans following delays in data collection by the Student Loans Company.
The SLC will pay loans without confirmation from institutions that the student was still attending at the start of this month. If the student has dropped out, the SLC will then have to reclaim the money.
Nationally 18 per cent of students drop out. The first term is thought to be the most likely time for students to quit. The maximum loan this year is Pounds 4,480, paid in three instalments.
Universities and colleges are supposed to inform a student's local education authority if he or she withdraws. The LEA then informs the SLC. However this process does not catch all the dropouts so the SLC asks universities and colleges to complete an attendance confirmation report.
A spokeswoman for the SLC described the exercise as "essential prior to the payment of taxpayers' funds" just two weeks ago. However, the SLC did not issue the attendance confirmation forms until the end of last week, forcing the company to extend the deadline for their return until after the start of next term.
The forms must be completed manually, a move which was attacked by admissions staff. It has emerged that the lists sent by the SLC were not even in alphabetical order. The SLC is expected to reissue the forms in the next few days.