'Huge relief' as students given loans in error get repayment reprieve

Around 22,000 university students who were told they would have to urgently repay maintenance loans and childcare grants that were given to them in error have been given a reprieve.

The government has announced that the affected loans will be repaid through the usual student finance route, and repayments on grants are paused until "at least" September.

It follows a row in which weekend students were told their courses had never been eligible for student finance and should instead have been classed as distance learning.

The National Union of Students said the decision came as a "huge relief", and that not having to start repaying within months will have taken "pressure off their mental health".

It's just a few weeks since students, including some on nursing or teaching courses, were suddenly told they had never been entitled to maintenance loans and childcare grants, and would have to repay them on an "accelerated timescale".

The Student Loan Company had been instructed by ministers to make clear to universities that courses delivered at the weekend, some including online components, should have been classed as distance learning.

The regulations had been in place since 2011, according to the government, which blamed universities for not being clear through either "incompetence or abuse of the system".

In the House of Commons, MP Josh MacAlister said the government had asked the Student Loans Company to "collect any over-payments through normal student finance repayments, and to pause recoveries of overpaid grants until at least September".

Some students faced having to find tens of thousands of pounds to repay, with the government saying it was up to the universities involved, and their franchise colleges, to make sure none suffered hardship.

Amira Campbell, president of the National Union of Students (NUS) said this still left students who were part-way through courses unclear about whether to continue.

"The government is still refusing to provide the future funding that all students are eligible for, meaning that many of these students have been considering dropping out mid-way through the degrees they have worked so hard for," she said.

Last week, the NUS handed in a petition signed by 13,000 students calling on the government to backtrack.

The BBC understands ministers became concerned that support wasn't being provided as consistently or urgently as needed.

Nine of the universities involved took the first step towards legal action last week over what they called an "abrupt" decision, which risked penalising mature students on low incomes trying to get a better qualification.

Some of the courses caught up in the row are delivered by private companies which have a deal with a university to teach their degrees, often in buildings hundreds of miles from the main campus.

The government has expressed concern this part of the system is open to abuse, and has said it will soon tighten regulations so that any of these franchise providers with more than 300 students have to register with the higher education regulator, the Office for Students.