PAC slams quango in student loans fiasco

6 Dec 10
MPs have issued a damning indictment of the Student Loans Company, describing the body’s performance in administering grants and loans last year as ‘completely unacceptable’.

By David Williams

7 December 2010

MPs have issued a damning indictment of the Student Loans Company, describing the body’s performance in administering grants and loans last year as ‘completely unacceptable’.

A report released today by the Commons Public Accounts Committee slammed the quango for delays in processing applications and failures to communicate properly with students.

The problems resulted in 100,000 students – a quarter of the total number – not receiving the funding they were due in time for the start of the 2009 autumn term.

It was the first year of a new Customer First Programme in which control of grants and loans to higher education students is gradually transferred from local education authorities to the SLC. The roll out is due to be completed next year.

But at the beginning of the 2009 academic year less than half of the loan and grant applications from new students had been fully processed. The SLC took a third longer on average to process applications than councils had the year before.

Meanwhile some 87% of calls to the SLC went unanswered in September 2009.

MPs attributed part of the problem to the targets set by the Department for Business, Innovation and Skills, which should have been for ‘fully processed’ applications, rather than ‘partly processed’.

The committee’s report, Customer First Programme: Delivery of student finance says that although the SLC has improved over the past year, ‘the rate of improvement has been disappointing.’

Sixty-nine percent of applications were fully processed at the start of term in 2010, but 26% were not processed enough for students to receive even an interim payment. The report adds: ‘We expected better.’

PAC chair Margaret Hodge called for a ‘step change in the performance of the SLC’.

‘The first year of the new system was chaotic,’ she said. ‘Many students had to do without their financial support for weeks if not months.

‘The Department also failed in 2009 to manage and monitor the programme effectively. Even as serious problems emerged, officials did not take prompt action. We are disappointed and concerned that no official seems to have been held to proper account.’

Universities minister David Willetts agreed with the committee’s verdict, adding that the new government has replaced the SLC’s senior team and made clear its expectation that the situation improves.

‘There is no room for complacency,’ he said. ‘We will continue to work closely with the SLC to ensure students and their families get the service they rightly deserve.’

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