Nine universities initiate legal action over student loan error dispute
More than 20,000 students were told that their courses were never eligible for student finance loans
Nine universities have initiated legal action against the government in a row over students being asked to repay loans that were "issued in error".
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Approximately 22,000 have been ordered to repay loans after being told they were "issued in error" for courses that were never eligible for student finance loans.
The students – who were all studying weekend courses – were sent letters by the Student Loans Company (SLC) reportedly stating their courses were never eligible for maintenance loans or childcare grants.
The universities in the legal case described the decision as "abrupt", while the National Union of Students urged the government to halt the "immediate clawback" of loans.
The government said students had been let down by "incompetence or abuse of the system".
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London Met, Bath Spa, and Oxford Brookes are among the institutions affected.
Yet, just three universities are putting their name publicly to the legal action - Bath Spa, Southampton Solent and London Metropolitan.
Maintenance loans cover living costs such as accommodation and food and are paid directly to students via instalments.
The maximum maintenance loan for a full-time student living at home in England is £10,473 this year.
Childcare grants range from £199.62 a week for one child and £342.24 a week for more than two children.
This means students claiming both the maximum maintenance loan and childcare grant could have to pay back almost £30,000.
Bath Spa University’s vice-chancellor, Prof Georgina Andrews, said institutions had acted in “good faith” and that the sudden decision unfairly penalises vulnerable students seeking to improve their lives through education.
The universities have strongly rejected the classification of in-person, timetabled weekend teaching as “distance learning,” calling it illogical.
A petition has gathered 13,000 signatures, and hundreds of students are set to protest in Westminster, where a delegation will present their case to the Department for Education.
The government maintains that universities must ensure students and graduates do not suffer financial hardship as a result, and, while declining to comment on legal action, argues institutions either misunderstood the regulations or exploited the system.
In response to the repayments issues, Universities UK said: “We recognise how distressing this is for affected students, and we want to reassure these students that universities are considering the different forms of support available.
"We will continue to work collaboratively with the Department for Education and Student Loans Company to understand how we can support the students impacted going forwards, and we encourage those affected to get in touch with their university to explore their options.”
Bridget Phillipson, the education secretary, said: “I have long been clear about our commitment to crack down on university franchising arrangements that do not deliver for their students and abuse the system. I will always prioritise protecting students and safeguarding taxpayers’ money.
"This is not students’ fault. Too many organisations have let their students down, through either incompetence or abuse of the system. Many of these organisations lack the necessary governance and oversight to properly implement clear guidance.
“Others have used this loophole as another opportunity to abuse public money. Either way, this is not the standard I expect from our world-class university sector."
A spokesperson for SLC said: “A small number of Higher Education providers have incorrectly categorised courses that are distance learning. The Department for Education has requested that providers work with SLC to enable us to re-assess entitlement, in line with the student finance regulations.”
