Nine universities start legal action over student loan error row
Nine universities take legal steps against student loan policy change
Over 22,000 students in England are now facing financial uncertainty after being notified their maintenance loans and childcare grants were incorrectly approved. The issue stems from a recent reclassification of weekend courses as distance learning, prompting universities to demand immediate repayment of funds. This decision has sparked legal action from nine institutions, including Bath Spa, Southampton Solent, and London Metropolitan, which argue the change was implemented without sufficient notice.
The Student Loans Company initially approved the loans, but the government now claims the error was due to “incompetence or abuse of the system.” Affected students, many of whom are nearing the completion of their three-year degree programs, received letters from their universities last month stating their courses were no longer eligible for funding. This has led to some students considering dropping out, as they struggle to meet repayment obligations.
“The sudden decision has caused serious financial distress for affected students,” said the universities in a statement. “Some are now at risk of having to leave their courses.” They criticized the policy shift as “abrupt” and “unreasonable,” emphasizing that in-person weekend teaching does not align with the definition of distance learning.
The National Union of Students (NUS) has condemned the situation, urging the government to pause the “urgent clawback” of loans. Alex Stanley, the NUS vice president, stated that students’ trust has been “broken” by the misclassification. The union has collected 13,000 signatures for a petition and plans to hold a demonstration in Westminster on Thursday, with a delegation presenting their demands to the Department for Education.
The government maintains that universities should have ensured students were not unfairly impacted. It also announced plans to tighten oversight of smaller colleges operating under franchise agreements, requiring those with more than 300 students to undergo scrutiny by the Office for Students (OFS) before accessing student finance. The OFS will publish draft guidelines later on Thursday, mandating institutions to provide clear information on refunds, complaints, and compensation for students.
In response to the controversy, the OFS emphasized its commitment to fairness, stating: “Institutions must prevent unexpected costs for students, including hardship support when maintenance loans are blocked. Where agreements cannot be reached, appropriate redress, such as financial compensation, should be offered in line with consumer law.” The Student Loans Company confirmed the regulations had been in place for some time, but the reclassification has created confusion and backlash among educators and students alike.
