Students will receive their loans on time this summer, despite technology problems that threatened to delay payments.

The Protocol system was rolled out to local education authorities (LEAs) by the Student Loans Company earlier this year.

Processing of applications was affected by the slowness of the web-based system, but the problems have been addressed and all students who applied on time will be paid on time, says the Department for Education and Skills.

'There were some initial teething problems that are being dealt with and we are well on the way to ensure all students are paid on time,' said a spokeswoman.

A document leaked to Computing shows that just six weeks ago LEAs were facing significant problems.

'We are expecting about 9000 applications this year and estimate that at current rate of progress up to 2000 may not have their applications assessed on time,' says the document.

Delays in providing some key functionality meant staff had to re-enter applicant information manually, it says.

Another LEA told Computing the system has improved, but not enough to solve the problem.

'All students who applied on time may be paid on time, but that may not be as a result of following the usual process but as a result of emergency payments,' said the source.

Liberal Democrat education spokesman Phil Willis said: 'It is shocking that these crucial documents are being dealt with by an expensive computer system that is not up to the job. Ministers must come clean over the cost of the Protocol and the chaos it might cause.'