UK universities issue pre-action letter over withdrawal of student maintenance loans

Nine UK universities whose students were incorrectly issued maintenance loans have shared their intention to pursue legal action against the Department of Education and the Student Loans Company.

22,000 students were wrongly informed that their courses were eligible for maintenance loans. They received an estimated £190 million in total for maintenance grants and loans, before being asked to pay this money back.

Weekend-only courses, classified as distance learning and not eligible for maintenance support, were incorrectly registered as qualifying for support.

The group of universities have co-signed a Pre-Action Protocol (PAP) letter, which sets out the details of the legal dispute and allows the government and SLC to settle the matter without the cost and publicity of court action. This is the first step a party should take before issuing an application for judicial review.

The nine universities impacted have claimed their decision stems from the “failure” of the Student Loans Company to “provide clear and consistent guidance” or to “meaningfully engage with the sector”.

Due to the minimal notice, students have faced serious financial distress and are at risk of not being able to continue their studies. Maintenance loans are essential for covering basic living costs, and the withdrawal has particularly affected those balancing work, caring responsibilities and education.

Alongside legal action, the National Union of Students (NUS) has launched a petition to the government, containing more than 13,000 signatures. It is expected to be presented to the Department of Education today (Thursday 16 April).

The institutions involved strongly reject the classification of in-person, timetabled weekend teaching as “distance learning,” as the policy is inconsistent with the Student Support Regulations as interpreted and applied since 2011.

Face-to-face study delivered in the week is considered “in-person,” whereas the same study delivered over the weekend is considered “distance learning.” According to the universities, this policy “defies common sense”.

The group has expressed disappointment that the DfE and SLC are characterising this change in policy as an “error by the universities when classifying their courses.” The universities have consistently followed and applied SLC guidance on course classification and argue this recent shift has been implemented inconsistently and without meaningful engagement with the sector.

The universities said they “stand firmly with their students are actively communicating with those affected” but argued “urgent action is needed to prevent lasting harm and call upon the government to revoke this action immediately and work with the sector to deliver a fair and sustainable solution.

Professor James Knowles from Southampton Solent University said: “At a time when the UK urgently needs to upskill and reskill its workforce, restricting access to finance risks undermining opportunities for individuals and dampening progress towards national economic goals.”

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Professor Georgina Andrews from Bath Spa University added: “The DfE and SLC state they want to prioritise the needs of students, but their actions have punished those who are the most vulnerable in our society who are trying to better their lives through education.

“It is indefensible that individuals are suffering for what is clearly a systemic failure by the SLC.”

The Education Secretary, Bridget Phillipson, said: “I have long been clear about our commitment to crack down on university franchising arrangements that do not deliver for their students and abuse the system. I will always prioritise protecting students and safeguarding taxpayers’ money.

“This is not students’ fault. Too many organisations have let their students down, through either incompetence or abuse of the system. Many of these organisations lack the necessary governance and oversight to properly implement clear guidance. Others have used this loophole as another opportunity to abuse public money. Either way, this is not the standard I expect from our world-class university sector.

“Universities must take immediate action to support students who will face financial difficulties as a result.”

A spokesperson for SLC said: “The Department for Education (DfE) and the Student Loans Company (SLC) are clear that providers are responsible for ensuring that courses are classified correctly and that student-facing information must reflect accurate attendance requirements, including weekday attendance where this is a condition of maintenance support.

“The specific regulation has been in place since 2011, and as per the Office for Students’ conditions of registration, all providers are required to adhere to these rules and ensure that courses are correctly designated. SLC’s clear role is to administer Government policy and regulations. In this case, we have acted urgently as requested by Government in order that public funds were not paid out in respect of courses that were incorrectly designated by certain providers.

“DfE wrote to a small number of higher education providers (HEPs) on 23 March, as they had incorrectly categorised courses that are distance learning. DfE urgently requested that these providers work with SLC to correctly categorise the courses to enable the reassessment of students’ entitlement in line with the Government’s student finance regulations.

“Following this instruction from DfE, SLC has written to approximately 22,000 customers to inform them of the error made by the providers and advised of the steps that are being taken to correct this.

“We fully appreciate students will be concerned about this action, however SLC is required to ensure that public money is used to support student finance as set out in the student finance regulations. DfE has made clear to HEPs it is their responsibility to support the students and provide financial hardship support. Following the courses being correctly classified and students being advised of their reassessed entitlement, customers will be able to make arrangements with SLC to ensure they are supported through this process, including affordable repayment plans being put in place where appropriate.”

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