Student Loans Company backlog causes University emergency loans to triple

- Over £30,000 borrowed from University this year
- Student loans crisis likely to continue into next year

Emergency short-term loans taken out by University of Manchester students have almost tripled since last year, now exceeding £30,000 pounds.

Short-term loans of up to £300 are available from the University for students experiencing unexpected financial hardship. Information obtained by Student Direct: Mancunion under the Freedom of Information Act shows that £30,972 was paid out to students between September 1 and November 27 this year. In 2008, loans for the same period totalled only £10,840.

“My student loan hadn’t come in,” said Law student Sophie, 20. “My rent was fine, my letting agent [Manchester Student Homes] was very understanding, it was worse for some of my friends who were expected to pay. I just couldn’t keep up with daily expenses, not even going out, just food, travel.”

She added: “My parents aren’t able to support me, not to that extent, and then some bills came in and I just reached the limit.”

All but a few who took out loans were undergraduate students, most of whom were experiencing difficulties obtaining funding from the Student Loans Company following a backlog of application that left over 100,000 without their loans for months and continues to affect students until today.

A University spokesperson said: “These were exceptional circumstances, but the University of Manchester acted quickly to help our students by making available short-term loans of £300 to eligible students.

“We also offered to defer tuition fee payments until January 2010. Students who had not heard from the SLC attended a central registration venue and were allowed to fully register as a student without proof of eligibility for a tuition fee loan. In order to safeguard the University, we asked students to supply bank details in order to deduct fees due in January if proof of funding had not been secured by that date. However, if some students are still awaiting assessment, we will be able to extend this arrangement, on proof of application.

“We also offered to defer some accommodation fees in order to help students affected by the delays.”

Meanwhile an independent inquiry into the SLC crisis launched by David Lammy, the Minister for Higher Education, accused the SLC of “conspicuous failure.” Over-optimism and indecision on the side of management was blamed for the crisis. The company was also accused of keeping information from the public and universities and students’ unions in particular, as well as not hiring sufficient staff to deal with applications; at the peak of the crisis, only five per cent of calls to the company’s helpline were answered.

Applications for next academic year, which were due to open last Monday have now been delayed, prompting fears that the delays could persist until next year. So far, no new application start date has been set.

The University of Manchester Students’ Union also offers short-term loans to students in need, albeit only up to £100. Between September 1 and November 30, 105 students had already taken out emergency loans from the Union, with an additional 20 taken out in December by the time Student Direct: Mancunion went to press.

UMSU Welfare Officer Vicky Thompson said: “With some students waiting for over two months for the money they are entitled to, the Student Loans Company has demonstrated that it is quite simply not fit for purpose and I find it a disgrace that in the current economic climate, there are students living on the bread line because of SLC mismanagement.

“In the Students’ Union Advice Centre, one of the most common problems faced by the students who drop in is financial hardship. This can force students to drop out of University or leave them living in poverty.”

She added: “I suggest that if a student finds themselves struggling to cope financially, they visit the Advice Centre to explore whether they are entitled to additional financial aid.”