22,000 students told to pay back 'mis-sold' maintenance loans

More than 20,000 students have been told they were given maintenance loans and grants in error and now face demands to immediately pay the money back.

The students, who are all studying weekend courses, received letters from the Student Loans Company (SLC) or their university saying their courses had never been eligible for maintenance loans or childcare grants.

One letter, from the SLC and seen by the BBC, says the student's university provided incorrect information and "unfortunately, they didn't tell us you only attended on the weekend".

It states that any "over-payment" will have to be repaid.

The BBC understands courses at 15 universities and colleges including London Met, Bath Spa, Leeds Trinity, Southampton Solent and Oxford Brookes are affected.

The courses each had in-person teaching at weekends, and some also had online learning during the week.

Students had signed up for these courses and taken out loans for maintenance and, in some cases, grants for childcare.

In a joint statement issued via Universities UK, the institutions involved told the BBC the issue stemmed from an "abrupt" decision by the government and that they were considering a legal challenge.

However, the Department for Education said students had been let down by "incompetence or abuse of the system".

Maintenance loans are paid to students in instalments to cover living costs, such as accommodation and food. Loans are means-tested, based on household income. And whereas student tuition loans, to cover course costs, are paid directly to universities, maintenance loans are paid directly to the student.

Students start repayments on both after they finish their degree and earn above a threshold.

Some of the affected students also received childcare grants, which for eligible students do not have to be paid back.

In an unknown number of cases the degrees are being delivered under a franchise deal, where the university awarding the degree has a contract with a smaller organisation to deliver the course.

The SLC told students to ask for extra help if the repayment would cause "financial difficulties" and that universities might be able to offer help or support.

The president of the National Union of Students, Amira Campbell, said students were "devastated".

"They're worried, they're not sleeping, they don't know where they're going to find the money," she said.

Khawaja Ahsan has just completed the first year of a BSc cyber security degree at the University of West London, which is advertised as having a Saturday intensive option for students who are working.

As well as a maintenance loan, Ahsan has received some childcare support for his three children as a grant, bringing the total to £14,335, which he may now have to repay.

"I feel betrayed and massively let down," he said, adding that he and his wife worked part-time and did not have the money to repay a lump sum.

Students over the age of 25 are assessed for maintenance loans on the basis of their own income and can also apply for some additional grants. The maximum maintenance loan for a full-time student living at home in England this year is £10,473.

Campbell said many of the students caught up in the changes were working during the week in order to get "bigger and better jobs in their future".

She described many of them as being from a working-class background, unable to find large sums of money at short notice.

Late on Wednesday, a handful of the students got a reprieve, with the SLC backing down and reinstating their right to receive payments.

The students in question are studying for a four-year BSc in acupuncture, which as well as weekend teaching includes 25 days of hands-on experience in a clinic each year.

Two weeks ago, the students, some about to take final exams, were told they would have to find a lump sum to repay loans immediately.

Speaking before the college won the argument with the SLC, one woman repeatedly broke down in tears, asking not to be named because of the uncertainty.

She was facing a demand to repay £37,000 while supporting herself through her studies in a minimum-wage job.

"The stress of it is making me ill, to be honest. I don't have that money."

Almost all the 22,000 other students are still grappling with how to pay back tens of thousands of pounds.

According to the NUS, many students have been given a deadline by their university of mid-April to decide whether to stay on their course.

Some universities are trying to add teaching during the week or transfer students to similar courses with weekday modules, so that students can continue to be eligible for loans in future.

This does not change the expectation that loans already taken out will have to be repaid by students, after the decision to clarify that the courses were not eligible.

"These students need reassurance that they don't need to suddenly take out major loans or find the funds from anywhere in order to pay back these funds immediately," said Campbell.

A statement issued by Universities UK on behalf of the institutions caught up in the row said they were "extremely concerned" that thousands of maintenance loan payments to students had been "abruptly blocked".

They said they were now urgently seeking clarification from the government and many were taking legal advice, adding that the main focus was supporting students.

However, Education Secretary Bridget Phillipson said: "This is not students' fault. Too many organisations have let their students down, through either incompetence or abuse of the system.

"Universities must take immediate action to support students who will face financial difficulties as a result."

The government argues some of the institutions could not implement clear guidance while others had "used this loophole as another opportunity to abuse public money".

None of the individual institutions approached by the BBC would comment.

A spokesperson for SLC said: "A small number of Higher Education providers have incorrectly categorised courses that are distance learning. The Department for Education has requested that providers work with SLC to enable us to re-assess entitlement, in line with the student finance regulations."