On-going problems with the student loans computer system threaten the prompt payment of loans, according to councils struggling to process applications.

Despite government assurances that all students who applied on time will be paid on time, the newly-introduced 'Protocol' system is as much as trebling the time taken for local authorities to turn applications around.

The web-based system was rolled out nationally to councils earlier this year but has had difficulties coping with the volume of traffic.

The problems hit the headlines earlier in the summer but the government said the glitches had been sorted out and there would be no ramifications for students (see Computing 7 July).

But councils are still facing problems and are now calling for the government to make contingency funds available for those students who will not receive their money in time for the start of the academic year in September.

'The inadequacies of the new computer system means that we need some students - specifically those that apply late to start courses - to be aware of the fact they may not get their loan before the start of the autumn term,' said Susan Robbins, head of education planning at Gloucestershire County Council.

The official deadline for loan applications is 2 July, but a large proportion of would-be students do not apply until the third week in August because they are waiting for their A Level results.

Wandsworth council in South London processes around 4000 applications annually, of which it expects up to 1400 to be made late in August.

'Local authorities are well aware of this late surge and the council's concern is that with the existing backlog of applications this rush will completely overload the system,' said Wandsworth cabinet minister for education Malcolm Grimston.

'The council remains extremely disappointed by the introduction of the new national IT system which has provided a much poorer service for Wandsworth residents.

'These problems result from the inadequate testing and rushed introduction of the new system and in the council's view were clearly identifiable in advance,' he said.

Using their old system, Wandsworth dealt with applications in around three weeks. Currently turnaround is standing at six weeks, and has been as much as nine weeks, says the council.

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