Thousands of students have been hit by a system error from the Student Loans Company (SLC) which meant their loans were not written off, the Parliamentary Ombudsman has found.

The Ombudsman has called on the SLC to make improvements to its Advanced Learner Loans (ALL) processes after a systemic issue affected around 4,000 students.

ALLs give students access to university when they do not have relevant qualifications such as A-Levels. Once the degree is completed, the loan is written off.

Jennie Bradbury, 38, from Stoke on Trent, received a loan for tuition fees worth £2,395 in July 2013 to fund a one-year access to higher education diploma in health at Stoke on Trent College.

Jennie went on to study a midwifery degree at Keele University. Her loan should have been cancelled in September 2019 when she completed her degree, but it took the SLC four years to cancel it.

Jennie contacted the SLC towards the end of 2019 to ask when her loan would be written off. She was told it would happen automatically and she would be notified. 

The SLC then contacted Jennie in June 2020 and again in May 2021 to tell her the loan had still not been written off.

After repeatedly contacting the SLC, Jennie received an apology and a £25 payment.

Jennie remained unsatisfied and later complained to the Independent Assessor for the Department for Education in August 2022. It recommended the SLC increase this payment to £200 and admitted the system issue was yet to be resolved. Jennie then complained to her MP, who referred it to PHSO in February 2023.

The Ombudsman found the SLC should have written off Jennie’s loan in September 2019 but delayed doing so until September 2023 following an investigation. The SLC also failed to transfer the outstanding balance from the ALL loan to her graduate loan account.

The SLC has now written off all outstanding loans which affected approximately 4,000 accounts.

The Ombudsman recommended the SLC apologises to Jennie, provides a plan of how it will communicate clear timeframes to any customers with ALL accounts who have raised an issue about their loans not being written off, and provide an extra £200 financial redress to her. The SLC has complied with our recommendations.

Jennie said:

“It was really frustrating. It made me really anxious as well because I was worried about the interest that was going onto my other loan and how it was going to affect it when I was paying it back.

“As if it isn’t hard enough being a student, you’re starting a new job just after a degree, you’re then trying to constantly chase this up to see what effect it’s going to have.

“Never getting a reply was the worst bit. Every time I would ring, they would say ‘we’ll get someone to get back in touch with you’ and then nobody did, or nobody would have an update – that was the most frustrating part.

“I think some people probably haven’t even realised their loan hasn’t been written off.

“As soon as the Ombudsman started to look into it and got the ball rolling, it didn’t take long for the debt to be refunded. I’m very happy.”

Parliamentary and Health Service Ombudsman Rebecca Hilsenrath said:

“Repaying a student loan is familiar to many university graduates, but the error made in this case caused real upset and frustration for Jennie. The problem was exacerbated by the fact that no one listened and no one did anything. Thousands of students have been affected by this and have been paying off a loan which should have been written off.

“We always seek to encourage learning from our investigations for organisations to take forward and improve their services. Complaints are an important source of learning and improvement. Following our investigations, thousands of people have had these loans written off. We welcome the steps which the Student Loans Company is taking to stop these system errors happening again.”