Universities have been told to change rules which could stop students from graduating or continuing their courses if they've unpaid non-tuition debts, such as accommodation bills or childcare services.
The Office of Fair Trading (OFT) believes universities and other higher education institutions which allow such academic sanctions could be breaching consumer protection law. (See our Stretch Your Student Loan guide if you're looking to make your cash go further.)
The regulator has written to 170 institutions urging them to change their rules. If they don't, it can take court action to force the removal of "potentially unfair or unreasonable terms being included in contracts".
In particular, it says it's concerned that some universities impose sanctions on students even when they owe small amounts, such as unpaid fines for overdue library books, or where a debt is disputed.
Nisha Arora, a senior director at the OFT, says: "Preventing progression or graduation not only affects students' educational experience but could also significantly harm their future employment prospects and ability to pay off their debts.
"Not all universities use these terms, and our report identifies some examples of alternative approaches. We expect all institutions to ensure that their rules and methods for debt collection are fair and comply with the law."
The OFT opened its investigation in July 2013 following a complaint from the National Union of Students.
What to do if you're struggling
If you're a student dealing with debt, you can get help and advice from a range of services:
- Talk to your welfare and support services provided by your university, which could include your local National Union of Students representative.
- See our Debt Problems guide for help, as well as contact details for National Debtline and Citizens Advice, which both provide free, confidential and independent advice.
- See our students section, for guides on student loans, the best bank accounts, and more.