More than 22,000 students told to pay back maintenance loans

More than 22,000 part-time students have been ordered to pay back their maintenance loans and grants as part of a government crackdown on franchise university courses.

Thousands of students across the country have received letters telling them that their courses had never been eligible for maintenance loans or childcare grants.

Letters have been sent to students at 15 universities and colleges, including London Met, Bath Spa, Leeds Trinity and Southampton Solent.

The move is part of a government crackdown on franchise courses, which allow students to claim thousands of pounds in taxpayer-funded maintenance loans and grants for weekend courses.

The franchise courses have been criticised in the past by an education watchdog for signing up students with 'weak' English and low attainment.

Franchise providers incorrectly registered the courses as 'in attendance' courses, which has allowed students to access loans and grants, thought to cost the taxpayer £190 million a year. 

Each course had in-person teaching at weekends, with some also having additional online learning during the week.

Many have accepted maintenance loans which were designed to help full-time students cover their living costs, some have also accepted childcare grants.

However, now they have been ordered to pay back the money given to them.

The Student Loans Company has told students to ask for extra help if the repayment would cause 'financial difficulties' and reassured them that universities may be able to offer financial support. 

In December, the government announced it would require the franchise providers to face mandatory regulation by the Office for Students or be completely cut off from student loan funding.

Two years ago, a Daily Mail investigation uncovered serious abuses of the higher education system through franchise courses.

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Whistleblowers said the courses were accepting students with such poor English that they cannot spell simple words, and who fail to attend classes as soon as they receive their first £4,000 maintenance loan and council tax exemption.

One source at a well-known university said they had seen instances of 'whole families' including elderly parents and grandparents enrolling on £9,250-a-year courses after being recruited by staff offering cash bonuses for new students.

The problem is said to be rife throughout the franchised university sector – where a university that awards the degree contracts another organisation to teach on its behalf, often in dingy office blocks on the outskirts of towns and cities for as little as eight hours a week.

Recruiters lure students in via social media, telling thousands of followers on TikTok and Instagram that 'the Government will pay you' to study and boasting how the money can be spent 'maintaining your travel addiction' and bankrolling 'wedding season'.

One told an undercover Mail reporter, posing as an applicant with no wish to study in 2024, that she could get a place on a £9,250-a-year course and that '95 per cent of people who get this money will never pay it back'. 

A report by the Office for Students in 2024 found that students recruited are disproportionately migrants who have leave to stay in the UK, and 62 per cent are studying business and management courses.

It found students are being recruited via third-party agents, with some giving 'inaccurate information' in 'attempts to sign them up'.

Some are offering 'financial incentives' to get students onto courses that are 'not right for them', and claiming the Government will 'pay them to study'.

In some cases, franchised courses have persuaded universities to allow them to lower entry requirements so they can recruit more students.

And once on the courses, some students have submitted assessments written by someone else, 'in some cases with the complicit support of staff members'.

Education Secretary Bridget Phillipson said organisations were using the student loans system as a 'loophole to abuse public money'.

She said: 'I have long been clear about our commitment to crack down on university franchising arrangements that do not deliver for their students and abuse the system. I will always prioritise protecting students and safeguarding taxpayers' money.

'This is not students' fault. Too many organisations have let their students down, through either incompetence or abuse of the system. Many of these organisations lack the necessary governance and oversight to properly implement clear guidance. 

'Others have used this loophole as another opportunity to abuse public money. Either way, this is not the standard I expect from our world-class university sector.

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

The Government insisted that students were not to blame for the overpayment of loans and has called on universities to foot the bill for struggling students.

Many have been told they must pay the sum immediately, just weeks before facing their final exams. 

The National Union of Students has launched a campaign to oppose the move which is forcing students to repay their loans.

Amira Campbell, NUS President, said: 'Students take on a massive debt to invest in their futures. 

'They trust the government, the Student Loans Company and their universities to handle everything correctly: now that trust has been broken, mistakes have been made, and once again students are made to face the brunt of it.

'These are working class students, many of whom are parents, who are using their weekends to gain a degree and invest in their futures. 

'They should not be facing a funding cliff edge because of a mistake or being mis-sold their course. The Department for Education and Student Finance England could be plunging 22,000 students, and their families, into poverty.

'A Government that are priding themselves on supporting parents through funded childcare, are now taking away childcare grants from students who are trying to better themselves and their families.

'From retroactively and regressively changing the terms of plan 2 loans, to mis-selling students weekend courses, our trust on the student finance system is at an all time low.'

On Wednesday, some of the students received a reprieve, with the SLC reinstating their right to receive payments.

Students who are taking a four-year BSc in acupuncture were able to keep their loans.

Now some of the universities are scrambling to schedule sessions midweek or transfer students to similar courses, so that they can continue to be eligible for the loans.

However, they have been told that loans which have already been paid out will still need to be repaid.