Heads are expected to roll at the beleaguered Student Loans Company (SLC) after a damning report today criticised the firm's handling of the student finance system.

Tens of thousands of students faced delays to their grants and loans payments this autumn after the SLC struggled to keep up with demand.

Professor Deian Hopkin's review highlights that, even now, weeks after the start of the new academic term, there are some applicants still waiting for their full loan and grant payments.

The investigation into the problems faced by the SLC this summer said there had been a "conspicuous failure in key areas" which had had a "far-reaching impact" on students (see the Student Loans 2009/10 guide).

In a response, SLC chairman John Goodfellow says: "The company is drawing up plans to address each of the recommendations in the report. This will include strengthening and restructuring the senior management team."

The review lays the blame on technical, management and services failures at the SLC for the "poor experience" of the many students using the application system this year

'Conspicuous failure'

This was the first year that the SLC took on complete responsibility for the entire system.

The report found: "While some aspects of the programme have been realised and good progress made on others, there has been a conspicuous failure in key areas of its delivery which has had a far-reaching impact on applicants and stakeholders."

While the report acknowledges the SLC saw a surge in applications this year, Prof Hopkin adds: "Due to a combination of technical, management and service failures, the experience of many applicants and stakeholders this year has been poor."

Wes Streeting, president of the National Union of Students (NUS), says: "The poor leadership and management of the SLC has led to disruption and hardship for hundreds of thousands of students. Given the catalogue of failures identified by this report, heads must roll if the public are to have any confidence in the SLC in the future."

Review results

The investigation found:

  • That "management indecision and over-optimism" meant the SLC did not act quickly enough when part of its computer system failed this summer.
  • The firm did not have enough people to answer telephone inquiries from applicants.
  • When the problems became apparent, the SLC failed to pass information to students, universities and the press, which meant they lost the "trust and confidence" of many people.
  • The company was then made to look defensive when it was forced to reveal information under the Freedom of Information Act.

"It appears the Company may well have suffered significant reputational damage as a result," the review added.

The report also criticised the Department for Business, Innovation and Skills (BIS), saying it was "too distanced" from what was going on.

Next year

It recommended that the SLC have contingency plans in place for next year, and improve its relationships with students - explaining the process and timescales.

The firm also needs to ensure it has adequate staffing levels to cope with demand, and that employees are properly trained.

The SLC has accepted the report's recommendations.

In a written ministerial statement this afternoon, universities minister David Lammy says: "I am now clear that decisive action is required to change the service and that the key to this is strengthening the leadership of the company and ensuring that the customer is at the heart of everything the company does.

"The chair of the Student Loans Company has confirmed that the senior management team of the Company will be strengthened and reorganised."

He adds: "The chief executive and chair of the SLC have publicly apologised for the difficulties customers have suffered. As the minister responsible for higher education, I too have expressed regret for the unacceptable service parents and students have experienced."

Sally Hunt, general secretary of the University and College Union, says: "This whole process has been a total fiasco from start to finish.

"It beggars belief that only 5% of phone calls were answered at the peak of the delays. Moving to university is a stressful and expensive time and to attempt to do that without finance that had been promised is just not on.

"Furthermore, as we all feel the pinch in these tough economic times, many parents, who will already have done their best to support their kids, will struggle to provide desperately-needed funds for their offspring."

Further reading/Key links

Student loans MoneySaving guide: Student Loans 2009/10
Student finance guide: Student MoneySaving
Student loans tool: www.studentloanscalculator.co.uk
Student loan help: Should I pay off my student loan?