MPs call for inquiry into student loans delays

IT may have contributed to problems issuing funds to students in time for start of university term

Willetts: System is "in meltdown"

The government faces a demand for an immediate inquiry into problems issuing loans, which have plunged thousands of students into financial difficulty as they start their degree courses at university.

A Commons motion complains about "the failings of the Student Loans Company to deal effectively with student applications in 2009" and "notes that when most had commenced their courses, 175,000 were waiting for their loans, of which 136,410 were first time applicants".

Some of the problems have been attributed to technical issues with the company’s IT.

The motion was put down by Liberal Democrat MP Phil Willis, a member of the Commons Innovation, Universities and Skills Committee, with support from Labour and a Northern Ireland SDLP MP and follows protests from Tory shadow universities and skills secretary David Willetts, who warned earlier the loans system was "in meltdown".

The MPs said that despite commitments to manage the backlog, 116,000 students had received no money and while recognising the company had to deal with record numbers of applications, said it "has failed to prepare adequately for the increased demand".

Willetts earlier demanded government ministers "answer for this year’s chaos ".

"We were told three weeks ago that 50,000 students were affected but now we learn that it could be three times as many or even more. Tens of thousands of students could be beginning their university days in hardship because of the government’s failure to run the system properly,” he said.

“The government is ultimately in charge of the student loans system and senior officials were present at all the meetings where problems were discussed, so ministers cannot duck their responsibility for this year’s problems.”