Student Loans Company still struggling

The Student Loans Company (SLC) has not improved its service enough after thousands of students were left without funds in 2009, the House of Commons public accounts committee has decided.

The committee said the company's operations had improved, but at a "disappointing" rate – a charge the government rejects.

The committee found a quarter of applicants this academic year ended up starting university term without even receiving initial funds. In response, Margaret Hodge, the Committee's chair, is calling for a "step change" in the SLC's performance "if students are to receive the efficient, effective, value-for-money service to which they are entitled".

The committee acknowledged that 69% of applications from new students were fully processed by the start of term and the company had outperformed its targets for answering calls – but that 26% of applications were not sufficiently processed for students to receive even an interim payment by the start of the first term.

The SLC countered that 99% of students who applied with the right documentation by the relevant deadline had received their funding on time and that the 26% of applicants referred to in the report were those who had not provided the right documents, had not signed their loan declaration form or who had not had their National Insurance number verified.

Problems with the student loans system were first highlighted by the BBC in August of last year, a probe which eventually found some 50,000 students ended up waiting for their loans.

Technology was the scapegoat initially, with SLC bosses saying telephones and a faulty scanner system were to blame, but later reports added the factor of how much management had underestimated the scale of the task.

The SLC now says new scanners have been installed and are functioning effectively.

“The Student Loans Company has significantly improved its level of service this year,” said Universities and Science Minister David Willetts, adding, “There is no room for complacency. We will continue to work closely with the SLC to ensure students and their families get the service they rightly deserve.”