Students with disabilities 'let down' by loans company
Students, particularly those with disabilities, served badly by Student Loans Company, report concludes
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By Darren Estwick. |  |
Friday, 19, Mar 2010 12:01
By Sarah Garrod.
A report from the government's spending watchdog has concluded that students, particularly those with disabilities, were failed by the Student Loans Company last year.
The National Audit Office (NAO) looked into how the service provided to students applying for finance in 2009 was handled after the Student Loans Company took over the processing of loan and grant applications for new students from England - which had previously been carried out by local authorities.
They found the process did not achieve value for money, and there were major problems in the processing of applications - with fewer than half of new applications being fully processed by the start of term. They said there were also issues with communication with applicants.
One of the main reasons behind the problems identified by the NAO was that the company failed to fully test a document scanning system. The report said: "Its failure was critical, and the company's contingency plan was both flawed and implemented late."
The report noted that the Student Loan's Company took 33 per cent longer to process applications compared to local authorities the year before, with only 46 per cent of new applications being fully processed by the start of term.
The situation got so bad, that the company received four million calls from concerned students in September - 87 per cent of which were unanswered.
And the NAO said in its report there were also significant concerns about the way in which the company manages the Disabled Students' Allowance. By the end of 2009, only 4,000 of 17,000 applications had resulted in a payment, taking an average of 20 weeks to be processed.
The report concludes:"The Department for Business, Innovation and Skills and the Student Loans Company underestimated the challenges in centralising this service. Neither the department's monitoring of the company nor the company's board's oversight were effective."
Mr Amyas Morse, head of the NAO, said: "The Department for Business, Innovation and Skills and the Student Loans Company underestimated, and therefore did not do enough to mitigate, the significant risks in integrating the student finance service previously carried out by 130 separate local authorities.
"Both bodies failed to grasp the magnitude of problems that were developing in 2009 as applications for loans, grants and allowances piled up and applicants struggled to contact the company by telephone. In particular, students with disabilities were supported badly."
The NAO said substantial risks remain to the successful delivery of the service in 2010, adding that while the department and company still expect to secure savings of around £20 million a year from 2011-12, this benefit will be outweighed greatly by continued poor service in administering over £5 billion of loans, grants and allowances.