Over 22,000 Students Face Repayment Demands After Loans Issued in Error

More than 22,000 students across England have been told to repay maintenance loans and childcare grants worth approximately £190 million, after the Student Loans Company determined the funding was issued to students on weekend-only courses that were never eligible under its own rules.

Individual repayment demands range from a few thousand pounds to £30,000, depending on the duration of study and whether childcare grants were included. The crisis centres on students enrolled on weekend-based courses at around 15 universities, many operating through franchise arrangements in which universities subcontract teaching to partner colleges and private providers. The SLC ruled that these courses failed to meet the eligibility requirement of "regular in-person attendance" during the week.

What makes the situation acutely worse is the legal structure of the repayments. Unlike standard student loan debt, which only becomes payable after graduation once earnings cross a salary threshold, these overpayments do not qualify as income-contingent debt. Because the error arose from a course classification failure rather than a straightforward SLC administrative mistake, the money is owed immediately and separately from any existing student loan balance. Students in financial hardship can apply to defer payments or pay in instalments, but this process does not automatically pause demands while students are still deciding whether to remain enrolled.

NUS President Amira Campbell said students were "devastated" and described the human cost plainly: "They're worried, they're not sleeping, they don't know where they're going to find the money." She framed the affected cohort as "working class students, many of whom are parents, who are using their weekends to gain a degree and invest in their futures." The clawback of childcare grants, awarded to students with children under 15, was described by Campbell as "particularly egregious." She confirmed the NUS had received a petition on the matter, MPs had been contacted, and some students were considering legal action.

A computer science student at Southampton Solent University, taught through franchise partner QA Higher Education, described receiving instructions from Student Finance to set up a direct debit for immediate repayment. "I was expecting to repay it after graduation according to a plan," the student said. "I'm not talking about hundreds of pounds, I'm talking about thousands."

Education Secretary Bridget Phillipson acknowledged institutional failure but stopped short of committing to write off the debts. "This is not students' fault," she said. "Too many organisations have let their students down, through either incompetence or abuse of the system." In December 2025, Phillipson had already written to providers warning that weekend-only students do not meet maintenance loan criteria, and pressed universities to take "immediate action to support students who will face financial difficulties." Named institutions caught up in the scandal include Southampton Solent University, London Metropolitan University, Oxford Brookes University, Leeds Trinity University, and the University of Wales Trinity Saint David.

Universities UK described the mid-year decision to block maintenance payments as "abrupt," and many institutions are now seeking legal advice, with some threatening action against the Department for Education. Kate Wicklow, director of policy and strategy at GuildHE, which represents smaller and specialist institutions, suggested the rules themselves were partly to blame: "We think the weekend study issue has surfaced a disagreement about some of the tensions and errors of what is in the regulations around student finance."

The crisis carries uncomfortable echoes of 2018, when nursing students at the University of Southampton discovered they had been overpaid by the SLC, with individual sums ranging from £600 to £3,900. The Royal College of Nursing called for write-offs and its then chief executive Janet Davies wrote directly to the SLC's chief executive. The government eventually offered short-term support including additional payments of up to £1,000 and a deferred repayment scheme. The current crisis is categorically larger: where 2018 involved hundreds of students and overpayments capped below £4,000, this one spans 22,000 students across England, with demands that can exceed thirty times that figure.

Many affected students had already been given a mid-April 2026 deadline by their universities to decide whether to continue on courses that may no longer be loan-funded. The government has yet to announce whether it will pursue write-offs or a structured relief scheme, leaving tens of thousands of students holding immediate debts they were given no reason to anticipate.