London university launches legal action after government clawback on loans

A London university has launched legal action against the government in a row over students being asked to repay loans as soon as possible.

The London Metropolitan University is among nine universities filing legal action after the government attempted to claw back loans handed out to students studying weekend courses.

Around 22,000 students who received tuition fee and maintenance loans, and in some cases childcare grants, are being asked to repay their loans as soon as possible.

Those affected were all studying weekend courses, which the government has now classified as distance learning and thereby ineligible for maintenance loans.

Bath Spa and Southampton Solent were the only other universities named in the joint pre-action statement.

The universities have described the decision as “abrupt” and said the Student Loans Company - which approved the loans - had failed “to provide clear and consistent guidance, or to meaningfully engage with the sector.”
The statement added: “Taken with minimal notice, the move had caused serious financial distress for affected students and placed many at risk of being unable to continue their studies.”
Professor Julie Hall, vice-chancellor of London Metropolitan University, said the decision “hits students from underrepresented and lower income backgrounds the hardest.”
The National Union of Students vice president Alex Stanley added that students’ trust had been broken as a result.

The Department of Education has accused the universities of misclassifying the weekend-only students and neglecting regulations.

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In a statement to the Standard, Education Secretary Bridget Phillipson said the organisations had let their own students down “through either incompetence or abuse of the system.” She added that universities must take action to protect students.

The government has been planning to introduce stricter rules for access to student finance.

In particular, courses delivered by private colleges under university franchise agreements have come under scrutiny, with Ms Phillipson vowing to crackdown on such agreements.

It is expected that any colleges with more than 300 students will be brought under the regulator the Office for Students before having access to student finance.

The Student Loans Company said that regulations had been in place since 2011 and universities were responsible for ensuring courses were being classified correctly, however, it would work with students to create “affordable repayment plans.”
In a statement, the government-owned firm said: “In this case, we have acted urgently as requested by the government in order that public funds were not paid out in respect of courses that were incorrectly designated by certain providers.”
Hundreds of students are set to gather in Westminster on Thursday following a petition of 13,000 signatures.

A small group will deliver the requests to the government.