Fears of student loan delays

The beleaguered Student Loans Company (SLC) is expected to deal with twice as many applications this year, but there is no proof it can deal with demand, according to the National Audit Office (NAO).

Tens of thousands of students faced delays to their grants and loans payments last autumn after the company struggled to keep up.

The NAO's report on the fiasco found less than half of applications (46 per cent) were fully processed by the start of the academic term last year, compared to 63 per cent in 2008.

Applications had been arriving more quickly than the SLC was able to process them, and by September 6 there were 241,000 that were not fully processed.

With the start of term approaching, the report found, calls from students chasing their applications soared, with four million made to the SLC last September.

Despite having a target of no more than 14 per cent of calls being abandoned, a massive 87 per cent were left unanswered in this month.

Between February 2009 and January this year, only a fifth (21 per cent) of calls were answered in 60 seconds, and more than half (56 per cent) were unanswered.

The findings showed the SLC took 33 per cent longer to process an application in the 2009/10 academic year than it had taken local authorities in 2008/9. On average, it took 12.4 weeks for an application to be processed in 2009/10, compared with 9.3 weeks in 2008/09.

A survey of 1,000 first-year students conducted by the NAO found more than half (51 per cent) were asked to send the same documents more than once; half (50 per cent) waited over three weeks for a proper reply to a written question; three in 10 31 per cent) had to ring more than five times before speaking to someone and around one in six (17 per cent) were told by the SLC that their documents had been lost.

The SLC took over processing applications by new students from local authorities for the first time in 2009, for the academic year 2009/10.

But the report was critical of both the SLC and the Department for Business, Innovation and Skills (BIS), saying they had underestimated the challenges of centralising the service.

This year, the SLC will handle applications from students starting university this autumn, as well as continuing to deal with applications from students who started last year.

BIS comes under fire from the NAO for failing to monitor the SLC properly, saying that "weaknesses" in the SLC identified in 2006, should have "served as a warning of the risks attached to such a challenging programme".

Two top SLC officials, ICT director Wallace Gray and marketing and customer services director Martin Herbert, quit in December.

They came after Prof Deian Hopkin's review of the problems said there had been a "conspicuous failure in key areas".

SLC chief executive Ralph Seymour-Jackson, said: "We deeply regret the problems that students experienced last year. I would like to reassure students and parents that lessons have been learnt."