New student loans chiefs must get a grip to avoid fresh crisis

The calamitous incompetence of the Student Loans Company last autumn leaves both resignations well overdue, and is something that NUS has long been calling for.

The news yesterday of the resignations of both the chair and chief executive of the Student Loans Company (SLC) is certainly to be welcomed. Indeed, the calamitous incompetence at the SLC exhibited last autumn leaves both resignations well overdue, and is something that NUS has long been calling for as a first step towards re-developing a functional student finance system.

Last autumn saw hundreds of thousands of students receiving their student loans well past the start of term – this was despite assurances from chief exec Ralph Seymour-Jackson that the backlog in processing loan applications, obvious to all except the SLC chiefs, would be rectified.

Students were unable to speak to advisors at the SLC due to chronic under-staffing, and so were left turning up at university with no money, and no sign as to when their loans would be made available.

Even by late October 2009 – well over a month into term for many students – as many as 146,000 students had not received their loans, despite their applications having been reviewed. And for many disabled students, who have certain additional funding entitlements, the wait for loans went on longer still. The seemingly blasé attitude the SLC took to the late payment of loans, which many students rely on to cover both their tuition fees and maintenance costs, was both deeply shocking and utterly unacceptable.

The resignations follow the publication of a report yesterday by PriceWaterhouseCooper (PwC) into last autumn’s debacle, which found “serious concerns” about the ability of the SLC to avoid a repeat of the problems this autumn, and expressed surprise at the SLC’s “lack of focus and urgency”. This followed a report by the National Audit Office in March which pressed the need for “radical improvement”.

Encouragingly, the new minister for universities and skills David Willits has acted decisively in asking SLC chair John Goodfellow to step down, while also expressing a lack of confidence in the chief executive. Whilst a change of leadership at the SLC is a positive – and indeed, necessary – first step, serious concerns remain about the organisation’s ability to competently provide loans this coming autumn.

Already, only 264,000 of an anticipated 880,000 applications for loans this autumn have been registered, with 114,000 having been processed for payment. There is also continued serious understaffing at the SLC’s call centres, highlighted in yesterday’s report, suggesting students may once again be left unable to determine the progress of their loan application, while problems remain with both the website capabilities and with the SLC’s handling of over-repayments of loans.

Professor Sir Deian Hopkin, who took over yesterday as interim chair of the SLC, himself made a series of recommendations for changes at the company in a report to BIS at the end of last year. I certainly wish him well, and must hope that he is able to swiftly implement those recommendations such that students do not once again have to suffer financial hardship because of incompetence at the SLC.

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