22,000 students told to pay back ‘mis-sold’ maintenance loans

22,000 students face repayment of ‘mis-sold’ maintenance loans

Over 20,000 students are being asked to reclaim maintenance loans and grants they were mistakenly awarded. The affected individuals, all enrolled in weekend-based programs, received correspondence from the Student Loans Company (SLC) or their institutions stating their courses were not eligible for financial support. One SLC letter, shared with the BBC, noted that universities provided inaccurate data, failing to disclose the student’s attendance pattern was limited to weekends.

The issue involves courses at 15 universities and colleges, including London Met, Bath Spa, Leeds Trinity, Southampton Solent, and Oxford Brookes. These programs featured in-person classes on weekends and, in some cases, online learning during the week. Students had enrolled in these courses, securing loans for living expenses and, in certain instances, childcare grants. In a collective statement through Universities UK, the involved institutions claimed the problem originated from a government decision, suggesting a potential legal dispute.

The Department for Education countered, attributing the error to “incompetence or abuse of the system.” Maintenance loans, designed to cover living costs like housing and food, are distributed to students in installments. Unlike tuition fees, which are sent directly to universities, these funds go to the student. Repayment begins once they complete their degree and earn above a specified income threshold.

Some students also accessed childcare grants, which are non-repayable. A notable aspect of the affected courses is their delivery under franchise agreements, where a larger university partners with a smaller entity to offer the program. The SLC advised students to seek assistance if repayment would create financial strain, noting universities might provide support.

“They’re devastated. They’re worried, they’re not sleeping, they don’t know where they’re going to find the money,” said Amira Campbell, president of the National Union of Students.

Khawaja Ahsan, a recent graduate from the University of West London, highlighted the impact. He had taken out a maintenance loan and childcare grant, totaling £14,335, which he might now need to return. “I feel betrayed and massively let down,” he stated, explaining that he and his wife worked part-time and lacked funds for a lump-sum repayment.

Students aged 25 and older are assessed based on their individual income for maintenance loans. The maximum annual amount for a full-time student living at home in England this year is £10,473. Campbell emphasized that many of the affected students worked during the week to pursue better career opportunities, often from working-class backgrounds struggling to gather funds quickly.

On Wednesday, a small group of students received temporary relief after the SLC reversed its stance. These students were enrolled in a four-year BSc in acupuncture, which included 25 days of clinical training annually. Two weeks prior, they were informed they would need to repay loans immediately, with one woman breaking down in tears, pleading for anonymity due to the uncertainty. She faced a £37,000 demand while working minimum-wage hours.

Despite the reprieve, the majority of the 22,000 students continue to grapple with repaying substantial sums. The NUS reported that some universities have set mid-April deadlines for students to decide on continuing their courses. The situation remains unresolved, with many still seeking clarity on how to manage their financial obligations.