The families across Jersey and Guernsey have been affected by an administrative mix-up that led to the Student Loans Company, which provides finance for students in England, Scotland, Wales and Northern Ireland, handing out more than £700,000 incorrectly.
Undergraduates from the Channel Islands are not eligible to apply for financial help from the company but more than 100 did and were successful due to the error. The SLC called for the money to be repaid ‘immediately’ following what they described as a ‘system error’ but many students had already spent the funds on tuition fees.
Now, over a year on since the mix-up, the UK government agency is still pursuing Guernsey and Jersey residents for £630,141.32. In total £722.358.90 was paid out in error and £92,217.58 has been repaid.
A spokesman for the SLC has said that 49 of the 129 cases across the Channel Islands have been referred to debt collectors.
He added: ‘The SLC has a robust system to pursue all borrowers for repayment, regardless of their location. Customers can arrange an affordable repayment schedule based on their financial circumstances. Where a customer repeatedly fails to contact SLC regarding their overpayments their account may be passed to a debt collection agency.’
According to data released to the JEP only eight students and their families have managed to repay the money in full, five of whom are from Jersey.
And despite the SLC admitting it was their administrative error that led to the payments being authorised last year, one student, who is believed to be from Guernsey, has been wrongly awarded over £1,000 during this academic year.
The student was paid £1,231.23 and the SLC have said that the application was ‘subsequently made ineligible during routine checks’ and they are now pursuing repayment.
Malcolm Ferey, chief executive of the Citizen’s Advice Bureau, said he sympathised with Islanders who had acquired the debt but urged them to make steps to arrange the repayment as soon as possible before it harmed their credit rating.
‘Ultimately this debt will need to be repaid and they could take court action and lodge an appeal locally which means they could recover the debt through arrest of wages. It is important that people do not shy away from this,’ he said.
One Islander, who has asked not to be named, said debt collectors contacted his family in an effort to retrieve £6,000 that his son had been given in a maintenance loan.
The father-of-four added that his son, who acquired the debt, had written to the SLC when they awarded him the loan to check he was eligible and he claims they assured him that he was.
The National Union for Students have said they believe students in the Channel Islands are being unfairly punished.
‘NUS believes that where students have provided information in good faith they should not have to repay the grants or loans. If an official mistake has been made students should not be made to suffer because of this.’
STUDENTS left in debt to the tune of tens of thousands of pounds because of a UK loan error will be allowed to apply for finance in Jersey despite the window for applications being shut, a senior Education Department official said earlier this year.
Andy Gibbs, head of careers and learning support at Careers Jersey, said in January that students who received UK loans in error would be allowed to apply for student funding in the form of a grant from the States to help offset the cost of repayments, as long as they are eligible.
Mr Gibbs had been in contact with Student Finance England, a branch of the Student Loans Company, and the UK department for Business, Innovation and Skills to try to persuade them to show some leniency over the issue.
He proposed that the loans could be honoured on this occasion, but even though the UK government department admitted that it was their error when processing Jersey postcodes, they insisted that the money had to be paid back immediately.
Mr Gibbs said: ‘Financial support is difficult for us, but students who are eligible for funding can still apply and we would consider their application even at this stage.
IT is hard to express anything but sympathy for those families caught up in the middle of an administrative error over student loans handed out last year.
Nearly 50 families across the Channel Islands now have UK debt collection agencies breathing down their necks after students were ‘accidentally allocated’ funds to pay for their time at university.
For years a separate system has existed for students from Jersey and Guernsey to help them meet the huge financial burden of furthering their education. But a mistake from the Student Loans Company in the UK meant that nearly £700,000 was handed out ‘in error’ to islanders.
According to data released to the JEP only eight students and their families have managed to repay the money in full, five of whom are from Jersey. The remainder that have not yet negotiated a payment plan with the company are now being actively pursued for the funds and face the very real threat of legal action.
Usually the loans are repaid over the course of several years, after graduation.
But the problem that some families now face is that the money has already been spent as those students affected are now entering their second or third years at university, or even their first year of employment and paying back this money will be very difficult indeed.
One father of four has spoken today of his frustration at the situation, particularly as the SLC confirmed his son was eligible for financial help.
Citizens Advice Bureau chief executive Malcolm Ferey is right in warning those caught up in this saga to contact the SLC as soon as possible because once an individual’s credit rating is affected, it can be very difficult to undo the damage.
An error is an error, and we all make them. But is it right to punish and harass these students at such a testing time in their lives?
Perhaps the relevant CABs in each island, or governments, could act on behalf of all of these families affected and negotiate for the entire group?
A joined-up approach will have better outcome for all.
