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Year 2009 No. 65, September 30, 2009 ARCHIVE HOME JBBOOKS SUBSCRIBE

Student Loans Company Leaves Thousands Stranded

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Student Loans Company Leaves Thousands Stranded

NUS Condemns Chief Executive of SLC

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Student Loans Company Leaves Thousands Stranded

Workers’ Weekly Youth Group

Delays in processing student grants and loans have left thousands of new students in England without the money they need to start their university courses. Many students are concerned that they will not receive their funds before the start of term, and have not been able to obtain further information.

This is the first year that tuition fee loans, maintenance grants and maintenance loans have been processed by Student Finance England, which is administered by the Student Loans Company (SLC).

It was recently revealed that the SLC was too understaffed to deal with the number of applications, leading to the current crisis. Pam Tatlow, chief executive of the Million+ group of new universities, said that “the additional demand from students starting in 2009 can hardly be a surprise and the SLC should have staffed up to meet the expectations of both students and universities”.

The SLC is a non-departmental public body of the government, established in 1990 for the provision of student finance, initially lending £190m. According to the SLC’s provisional figures, £2.9bn was lent in the financial year 2005/06. There was approximately £16bn of outstanding debt in 2007.

The government began to sell off portions of student debt in 1998 to private companies, such as Finance for Higher Education, formed by Greenwich NatWest, and Honours Student Loans Company, a trading name of Honours Trustee Limited, which was set up by a consortium of Deutsche Bank AG and the Nationwide Building Society. The SLC serves as a central point in a parasitic arrangement from which student debt can be packaged off to such private companies in lucrative deals. Another wave of sell-offs is currently under consideration, fraudulently presented as "raising money" for the government. These sales themselves have resulted in confusion and mishandling in a number of cases.

The government must directly intervene to ensure that all students get their loans in full and on time. This is a critical point in student funding, where the SLC and its parasitic arrangements lie exposed, forcing the issue of which side the government will take: to remain silent, or to intervene in favour of the students? Students should hold the government to account over this issue and keep up the pressure. Moreover, they should take up politics themselves by discussing the situation and the need for an alternative based on recognising that education is a right, not a privilege.

Student loans were originally introduced to supplement the inadequate maintenance grant. After grants were abolished in 1998, loans became the sole means of student funding outside of personal financing or family support, until replaced by the current complex system of fees, grants and loans. The argument all along the line was that students should pay for the privilege of a university education. The current fiasco exposes the reality that student loans were brought in to further entrench the interests of big business that have seen rich and easy pickings, without regard for the consequences for students. The abolishing of the grant and introduction of tuition fees in 1998 was a key moment when the government cast aside any recognition that education is a right and came down on the side of class privilege and monopoly right.

There is an alternative: to take the rights of all to education as the starting-point. As a social need, education ought to have a priority claim on the economy, and access must not be based on any individual consideration such as personal or family wealth. Money should simply not be part of the equation in deciding whether to go to university. Students should organise discussion to elaborate this alternative in the course of demanding what is owed to them from the SLC, working out proposals for the way forward that will eliminate the need for loans altogether. By participating in politics through mobilising support for the alternative, students will firmly place their agenda at the centre of the political arena, reducing the space that the anti-social agenda of plundering student welfare has to manoeuvre.

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NUS Condemns Chief Executive of SLC

The National Union of Students last week condemned the Chief Executive of the Student Loans Company, Ralph Seymour-Jackson, for claiming that it was "reasonable" for 50,000 students to have to start university without the full loans and grants they expected.

The criticism came after an appearance on BBC Breakfast News by Seymour-Jackson on September 17 in which he said, "We admit the situation is not perfect, but it's reasonable."

NUS President Wes Streeting said, “It is completely unacceptable for some of the poorest and most vulnerable students in the country to be left short of funds because of the incompetence of Student Finance England, and it is particularly insulting for Ralph Seymour-Jackson to claim that this situation is ‘reasonable’.

“Student Finance England has assured us time and again that significant backlogs would not be a problem, but now it is apparent that this is not the case. Ralph Seymour-Jackson needs to stop downplaying the significance of the problem so that universities can step in where necessary with contingency funding.

“Student loans are a lifeline to many people, and without them the costs of university would simply be unbearable.”

This news comes just days after Streeting wrote personally to Seymour-Jackson demanding answers following mounting concern regarding the processing of student finance applications.

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