Update: 20,000 weekend students to repay living loans as normal after Government reprieve – but they'll still lose funding going forwards

The announcement comes after some students on weekend courses were told earlier this year to repay maintenance loans and grants either in full, via an agreed repayment plan or through a deduction from future funding entitlement.

Normally, if you're only studying in-person on weekends, you're NOT eligible for maintenance loans – which are designed to cover living costs and transportation – or targeted grants for childcare costs.

But the Department for Education (DfE) said in March that 15 universities incorrectly classified these courses as "in-attendance", rather than "distance learning". Due to the error, students applied for and received maintenance loans and childcare grants worth about £190 million during this academic year.

Commenting at the time, MoneySavingExpert.com founder Martin Lewis said the mix-up was an "almighty pig's ear," and stated that it is "only fair that students should be able to continue to repay any student loans, under the normal procedures".

Students can now repay living loans on previously agreed terms

Two major changes have been announced by the Government:

1. Affected students can now repay maintenance loans they've already received under their initially agreed terms. This comes after the Government cited concerns over how some of the universities involved had been dealing with affected students.

2. Demands to repay childcare grants in full as soon as possible have been PAUSED until at least September. The Government has asked officials to review options for these students and to consider how grant recovery should be handled going forward – taking into account a balance between both students and taxpayers.

An spokesperson for the Student Loans Company (SLC) said affected students will soon receive a letter which explains what this means for them and what the next steps are.

One affected student, who asked to remain anonymous, told us they were relieved by the decision. They said: "It's a significant relief to know that any maintenance loan overpayments will be repaid under the original terms, rather than as immediate lump sums or instalments. This provides much-needed reassurance to affected students."

But students WON'T get living loans or grants going forwards

However, affected students will NOT be given access to living loans and childcare grants going forward – even if they're mid-way through their degree. This means continuing students will have to:

• Stay on their existing degree without additional maintenance support or childcare grants – though individual universities may be able to offer help via hardship funds or other grants, OR;

• Switch to a non-weekend course that's classed as "in-attendance" in order to access a maintenance loan and/or childcare grant.

'A good first step – but many are still considering dropping out'

Commenting on the announcement, Amira Campbell – president of the National Union of Students – said: "For the 22,000 students who were being asked to pay back as much as £55,000 on an incredibly sped up timeline, this will be a huge relief.

"They have fought so hard against the withdrawal of their maintenance loans and childcare grants, and not having to start paying them back as soon as next month will have taken some pressure off of both their mental health and bank accounts."

However, Ms Campbell continued: "The Government is still refusing to provide the future funding that all students are eligible for, meaning that many of these students have been considering dropping out mid-way through the degrees they have worked so hard for. This is a good first step, but we need the Government to confirm that they will continue to fund current weekend students' studies until this cohort finishes their courses."

Education Secretary: 'Too many organisations let students down'

When the Government first said it was revoking the loans, Education Secretary Bridget Phillipson said students were not at fault for the error and added that "too many organisations" had "let their students down, through either incompetence or abuse of the system".

However, an unnamed group of affected universities – speaking via Universities UK – blamed the incident on the Government instead. The group said it was "extremely concerned" that the payments had been "abruptly blocked", adding that it was taking legal advice to "challenge the actions" of the DfE and the SLC. We've asked for an update on this challenge.

Following the Government's reversal, a spokesperson for Universities UK – which represents 142 universities – said: "Students and their families are facing unexpected financial pressures that risk causing hardship. We are pleased to see the Government considering how it can assist with mitigating these impacts."