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Two directors of the Students Loan Company have resigned after cock-ups meant thousands of students did not receive their loans until DECEMBER.

ICT director Wallace Gray and customer services director Martin Herbert were forced to resign after being blamed in a report into the fiasco.

A system for scanning students' documents failed and there was no adequate backup, the report concluded.

When people tried to contact the loans company, as many as 95% of their phone calls went unanswered.

Universities were forced to dip into emergency funds to bail out penniless students, and were unable to contact the SLC.

A statement from the SLC said: "We would like to say sorry again to those customers who have been so let down by us over the last few months."

But the statement also admitted it could be another two years before the service was running properly: "Achieving the full vision for Student Finance England service was always supposed to be a three-year process."

On 27th October, 146,000 students were still awaiting payment. On 29th November, there were still 35,000 who hadn't received their loans.

One student told the BBC she was so desperate for money she would become a stripper.

Critics today called for a dramatic reappraisal of the student finance system.

Simon Leggett, president of the Socialist Students' Coalition described the crisis as "one giant argument against privatisation."

He added: "Why couldn't the government bail students out?"