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The Student Loans Company chasing vulnerable students: A very worrying trend.

Background to the Student Loans Company's (SLC) adverse publicity about spying on 'vulnerable' students. More openness from the SLC about how they are making decisions is needed urgently and a simpler approach would help. All students should have an equal chance to study to fulfil their full potential. This should be the motto of the SLC etched deeply into the foundations of the whole organisation.

When news broke this week that the Student Loans Company (SLC) had started ‘spying’ on students who were claiming student loans [1] on the basis that they were estranged from their families, it seemed that they had stooped to a new low in their already low reputation. Questions were asked about the logic behind their move. It appears that SLC had singled out at random 150 students who were in receipt of full maintenance loans because they had declared they had no family to support them. Of these, 81 were deemed to have misrepresented their situation. The SLC had trawled through their social media posts to see if any had some communication with their family. 

By the 8th of August, the SLC had retreated a small way and promised to review their processes [2]. But this fell short of restoring the loans to 44 of the students still affected. This was despite not having completed an inquiry into the circumstances. Becca Bland, of the Charity Stand Alone, who had raised the problem in the first place [3], called the SLC’s actions “a hostile and aggressive measure against some of the most vulnerable students in the UK, who lack family capital and are already financially disadvantaged”. It would seem that the practice adopted by the SLC would not have come to light without the actions of Stand Alone.

Imagine the situation of a student with no family support suddenly losing planned income that was very low to start with. Then finding that they are effectively punished for so called ‘fraud’ and ‘convicted’  if they cannot provide more evidence of no contact with their family within 28 days. It seems we did not have to go far to see the obvious consequences. Some were made homeless and one student has withdrawn from his degree at Salford University. The SLC were acting in a manner somewhat similar to the ‘authorities’ and the scenario in Franz Kafka’s ‘The Trial’ that set out a warning to us all as far back as 1925.

More trouble for the Student Loans Company.

The SLC has been already been a greatly troubled organisation in its short history. When it started in 1989, it provided grants and loans supporting students entering Higher Education through a loan service to the Local Education Authorities. These carried out the assessment processes and the role of the SLC was limited in this respect. In 2009 the SLC started to carry out more and more assessment work as the size of the operation expanded. They now report that they have over 8 million customers and a loan book of more than £117 billion. Complaints of mistakes, poor service and inefficiencies have dogged them since then. It is also strange that a body whose business is in loan provision is not regulated by the Financial Conduct Authority [4]. That influence might have ‘brought them to heal’ a long time ago. Reports in 2014 that they had sent ‘fake’ solicitors letters to those making repayments astounded many. The Daily Mail called them ‘Wonga Style’ Fake solicitors letters and this seemed a very fair assessment of what they were doing at the time [5]. This has inevitably affected the leadership. After SLC failed to make payments to thousands of students, CEO Ralph Seymour-Jackson resigned in 2010. Then Ed Lester left the position in 2013 over a tax avoidance scandal. More recently Steve Lamey was dismissed as CEO after ‘whistle blowers’ questioned his leadership. He cited a ‘witch hunt’ arising from his criticisms of the organisation [6]. Indeed, he had 'scored own goals' when he criticised inefficiency and mismanagement at the company in public.

What of the SLC leadership now?

The current CEO Peter Lauener was appointed in November 2017 on a temporary basis and is still in place. There is little doubt that he is considered a ‘safe pair of hands’. He was about to retire as CEO of the Education Funding Agency (EFA), a position held from 2012, and then from the Skills Funding Agency (SFA) he also led from 2014. In 2018 he has added further roles as Chair of the Newcastle College Group and Chair of the Construction Industry Training Board (CITB). If the alleged ‘inefficiencies’ existed at the SLC then Peter Lauener would have observed what Steve Lamey observed. However, he was unlikely to make these observations known in public. Instead, one might have expected a tightening of the operation and, in particular, its confidentiality. 

In relation to Board meetings, the SLC states “Copies of meeting minutes will be available following their approval at the next meeting”. Indeed they are duly posted for monthly meetings up to September 2017. As of today, nothing has appeared since then [7] and there was no hint that a tightening of the rules for estranged students would happen.

What were the SLC thinking when they started investigating a random sample of students?

The situation that estranged students, and others that are vulnerable, find themselves in would appear on the face of it to be a serious concern for the SLC. To such an extent that they have formed a Vulnerable Students Stakeholders Group that meets three to four times a year [8]. Becca Bland is on this group and she would have had some warning of things changing. Its last meeting on 22nd of May 2018 reported that “A discussion took place around a Counter Fraud Services (CFS) exercise which had included a sample of vulnerable students selected at random. Questions were asked over CFS processes, the reasons for examining applications and the potential consequences for students. CFS explained that the aim was to eliminate fraud and identify any risks within the application process.” It seems that there was some concern about fraud in particular and that CFC were called in as an independent commercial organisation to investigate [9]. This implies that they were ‘fishing’ to see if there is a wider problem. Alternatively, they could be seen as being motivated by a desire to deter students with no family support. That would also imply a wider political and social agenda.

Since 2016, the SLC has had an improved procedure to help identify such students [10]. These changes help estranged students to apply for loans more easily. It is stated that: “New students requesting to be considered estranged will be asked to provide supporting evidence from an independent third party in the first instance as usual. If the student has difficulty in providing robust evidence SLC will contact the student to discuss and help them to review other possibilities. SLC will give contact details of a named Estrangement Assessor to the student at this point to provide a consistent point of contact. If no or minimal evidence of estrangement can be sourced a telephone review will be arranged at a convenient time to enable SLC make their assessment.” Also that: “Estranged students who return and apply for support in the following academic years of their course, and who confirm their situation has not changed as part of their application will not generally be asked to provide evidence again”. Perversely and sadly, a review of the process could reverse these procedures.

A crisis of confidence and confusion about what estranged students are and what they can ask for.

News that the SLC had started to investigate vulnerable students randomly and are ‘reviewing’ their processes destroys any trust that vulnerable students might have had in the system. Indeed, those responsible might want to consider how profoundly  risky their actions were with regard to the wellbeing of the students. They were not designated as 'vulnerable' for nothing.  It is clearly also risky for a student with little to take out a full maintenance loan that can suddenly be withdrawn. Yet there also seems to be wider confusion about what they were getting in support. This is exemplified well by a question asked by Alistair Darling during recent evidence gathering for the House of Lords Economic Affairs Committee. He expressed concern that a call for means tested grants would take us back 40 years to when parents did not provide the expected parental contribution.


[see the video clip here]. 

He had to be corrected on the grounds that the current loans system was also means tested on family income and that parents with more income were still expected to contribute well above the sum of a lower loan offer. 

The rules for estranged students are relatively simple but difficult to fulfill. They must produce evidence that they have lost contact with their families for the previous 12 months. Writing to a family that will not respond seems a futile request and asking students for some independent witness to their situation, however sensible, is demeaning. If their family refuses to declare their income, the loan defaults to the minimal loan. This generally deters and even precludes students gaining access to Higher Education. Going from £8,430 (in 2017/8 for students in England living away from home outside London) to a maximum of £6,009 (available for families with more than £45,000 pa)  could be the breaking point [11].

Partial estrangement, a lack of understanding and a simple solution.

It is simply the wrong way to approach the loans system by considering anyone who seeks the full maintenance loan as a potential fraudster. Yet this is exactly how the SLC viewed those seeking such help. Although those that are estranged are very much exposed to economic crises, the reality for many other students, as Alistair darling put it, is that they are not out of contact with their family but they receive no financial support. This could be seen as having a similar need but are ‘partially estranged’. Conversely, a substantial number of students do not apply for a loan of any kind and are fully funded by their family. A recent research briefing for the House of Commons is very illuminating [12]. This is further emphasised by the July 27 2018 TEFS Blog that reported the vast majority of students have no job during their studies [13]. They are fortunate to be able to take the full benefit from the opportunity presented to them. However, in this sense, the loans system is regulating itself. It might be that only those in need of a full maintenance loan actually ask for it. This may be because of full estrangement, that is hard to prove, or ‘partial estrangement’. Indeed the situation could be worse still for students that have been subjected to abuse. Those that end up in the care system, and more easily identified, do receive help. However, many more are in a difficult ‘twilight zone’ and suffer in silence. 

The whole system seems to be driven by a middle class notion of family. It is automatically assumed by many in authority, who probably have no experience of hardship in their backgrounds, that all families support their children in their education. The idea of a non-supportive family  existing probably eludes them. However, those with direct experience of this, and their many teachers, know better but are not listened to. There may be a genuine suspicion and disbelief through a lack of understanding and more input from those with direct experience of such hardships is needed in the governance of the SLC.

The solution is really a simple one. Offer the maximum loan to all. Those in need will seek this and should not be seen as potential fraudsters. Others will not seek a loan, or seek a smaller loan if they have some support. Most students and their families will want to minimise the loan burden if they can.  This already happens for those with the resources. More openness from the SLC about how they are making critical decisions is needed urgently and a simpler approach would help. 

Mike Larkin, is an Emeritus Professor of Microbial Biochemistry. He retired from Queen's University Belfast after 37 years teaching Microbiology, Biochemistry and Genetics. 


[1] Student Loans Company 'spied on vulnerable students' social media' Exclusive: Support workers say estranged students lost funding despite no finding of guilt of fraud. The Guardian Thu 2 Aug 2018.
[2] Student Loans Company reviews processes after 'spying' scandal The Guardian Wed 8 Aug 2018.
[3] Why is the government halting loan payments to vulnerable students? The Guardian Higher Education Network
[4] Letter from the CEO of the SLC to the House of Lords Economic Affairs Committee
[5] Student Loans Company uses Wonga-style fake legal letters: Business invents firm to harass graduates who are behind with repayments. Daily Mail 30 June 2014.
[6] Civil Service World 4 December 2017 Sacked Student Loans Company chief ‘faced allegations from two whistle blowers’.‘faced-allegations-two-whistleblowers
[8] SLC Vulnerable Students Stakeholders Group meets three to four times a year
[9] Counter Fraud Services.
[10] Changes to estranged students evidence validation process 03 May 2016
[11] Student finance - how you're assessed and paid. and and
[12] House of Commons Briefing Paper Student Loan Statistics
Number 1079, 18 July 2018.
An excellent and illuminating overview of the student loans system and how loans are taken out.
[13] TEFS Blog. The vast majority - one million - of students have no employment when in

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