Students feel ‘misled’ after being forced to pay back loans

Campaigners are calling on the government to pause plans to force thousands of students to repay loans issued in error, saying they are “paying the price” for mistakes made by universities and policymakers. 

The National Union of Students (NUS) is urging the education secretary to rethink after it emerged that approximately 22,000 students had been wrongly classified as being on courses eligible for maintenance loans.

These students were enrolled on weekend courses, which are counted as distance learning and therefore not eligible for cost-of-living support, even if teaching often takes place on campus.

Universities say the government only recently clearly set out the definition of a weekend-only student and that they had been working to rectify the situation. 

However, in the meantime, the Department for Education (DfE) and the Student Loans Company have moved to begin recouping the payments from students.

Amira Campbell, president of the NUS, said some had been asked to start repaying as early as April but many aren’t in the financial position to do so. 

“Fundamentally students feel that they’ve been let down and misled,” she said. “What we’ve got is a situation where they were told they were eligible, they signed off and received the financial support that they needed for the courses that they were doing, and now have been told in retrospect that they’ve got to pay all of this money back.”

“The government needs to pause on this,” she continued, adding that students “don’t even know who to blame, who is responsible and what is happening”. 

Universities are considering taking legal action against the DfE over the incident, but education secretary Bridget Phillipson has said the issues were down to providers’ “incompetence”. 

Institutions involved include Southampton Solent University, London Metropolitan University, Oxford Brookes University and the University of Wales Trinity Saint David. All were contacted for comment.

In response to its enquiry to London Met, Times Higher Education was sent a statement by a PR company that said it was working on behalf of several universities affected but declined to say who they were.

It said: “We are extremely concerned that thousands of maintenance loan payments to students across the country have been abruptly blocked. 

“Many of us are currently working together to take legal advice to challenge the actions of the Department for Education and the Student Loans Company. 

“We have raised our concerns with the Department for Education urgently and it is important that this matter is resolved by the relevant agencies with both sensitivity and clarity. While this situation is being reviewed, communication with, and support of, all students who may be affected is our primary focus.” 

In a letter to providers in March, the DfE said it expected universities to put hardship support in place for affected students, including financial support. 

Many of the students impacted are on courses operated by franchise providers, and Phillipson suggested this was an example of further bad practice within this part of the sector, which has been dogged in recent years by evidence of bad actors enabling non-genuine students to access student loans. 

However Campbell said the comparisons were unfair. “There’s nothing disingenuous about the phone calls I’ve been taking,” she said. “They’re very much real students. They very much want to learn, they want to upskill themselves and they want to set themselves up for a better future.”

She said it was “particularly egregious” that the government is also attempting to recover childcare grants given to parents studying on affected courses. 

Campbell linked the incident to wider conversations about the fairness of the student loan system, where repayment terms have been retrospectively changed by successive governments. 

“When other people make miscalculations…it’s constantly students paying the price,” she said.

The DfE was contacted for comment. In a statement issued in March, Phillipson said: “This is not students’ fault. Too many organisations have let their students down, through either incompetence or abuse of the system. Many of these organisations lack the necessary governance and oversight to properly implement clear guidance.

“Others have used this loophole as another opportunity to abuse public money.”

helen.packer@timeshighereducation.com