Greg calls for urgent action on student loans crisis

10.35.00pm BST (GMT +0100) Thu 10th Sep 2009

Greg Stone, Lib Dem parliamentary spokesman for Newcastle East, which has one of the largest student populations in the country, has called for urgent Government action to address the growing crisis in administration of student loan payments.

As in the region of 40,000 students prepare to start the new university year in the city, there are growing reports of problems in the Student Loan Company's administration and payment of loans to students who rely on this as their main source of financial support.

There are significant numbers of complaints being made in the city and nationally about long delays in getting decisions on applications, getting through to the company on telephone helplines, and ensuring payments are made. There are fears that the system is seriously overloaded and there are doubts over whether the Government is fully in control of the situation. Earlier this year the administration of the weekly Education Maintenance Allowance to 16-19 year olds in further education and training also ran into crisis.

Greg said "After introducing tuition fees and driving up levels of student debt, Labour are intent on causing further financial misery for students. I have heard today from a student who is waiting for their loan so they can start their course.

"After 10 weeks they have heard only conflicting advice after long waits in telephone holding queues, and have no news on when their loan will be paid. They are understandably very anxious and it is a very stressful time.

"I am concerned that the Government is not in full control of the situation and I believe urgent action is now required to rectify the situation."