The government has admitted to not contacting any of the hundreds of FE loan scandal victims despite having the power to cancel their debts.
The education secretary has been able to cancel advanced learner loans for learners left in debt when their provider goes bust since July 1, 2019, following a change in legislation.
But in response to a Freedom of Information request, the Department for Education (DfE) said “268 students have been identified as in scope and are to receive a letter to that effect” but “none” of them have had their loans partially or fully cancelled.
It is understood that as many as a further 423 students could be in scope for a debt write-off.
The admission has prompted criticism from the National Union of Students, who said “too often learners don’t receive clear and timely communication, and too often they are not given the level of priority they deserve”.
The FOI response said those in scope were previously made aware that they are “not in repayment in 2019-20 and they will be contacted in the next steps.
“The department is, with the Student Loans Company (SLC) and the Education and Skills Funding Agency (ESFA), currently assessing each case in which a student is in repayment deferment. Students will be notified in the coming few months.”
The DfE would not be drawn on why those in scope had not yet been written to.
The government first asked the SLC to defer loan repayments for affected learners during the April 2017 to March 2018 tax year, and extended deferrals in subsequent tax years.
While individual learners are assessed on a case-by-case basis, former students from John Frank Training, which went into liquidation on November 30, 2016, were expected to be in scope of the new legislation.
Mussarrat Bashir, 55, was undertaking a level 3 BTEC certificate in hospitality at the provider when “a few months in, everything just fell apart” and she was left with an £8,000 debt.
She was later offered a place on a course in Chester, but this was “not viable” as she worked full-time in Stoke-on-Trent, where she had previously been studying on the same site.
Bashir, who now works as a tutor assessor, said: “Any loan on you is always a restriction. It affects your credit history.
“It is stressful when you’ve got other pressures like family. I’m a single parent, I’ve got my own burdens.”
Bashir alleges she has never received any communication regarding loan repayment deferral and has had to make repayments over the last three years, although these claims could not be verified at the time of going to press.
The SLC and DfE were approached for comment about the accusations but, at the time of publication, the SLC could only confirm that Bashir’s loan is now in deferment and she will be contacted shortly about her eligibility for loan cancellation.
“You just want it off your [mind]. It’s been dragging on for a very long time now. We should have the assurance it is done and dusted,” Bashir added.
In the response to the FOI request, the DfE said a greater number of 691 students are “currently not required to make repayments on their advanced learner loan as these loans have been identified as possibly being in scope of the regulation.
“If these students have other loans, which are not potentially in scope of the regulation, they will be required to make repayments on those if they have reached their statutory repayment due date and meet the current repayment threshold.”
According to the DfE, those that are determined to be eligible will be required to reply to the SLC for cancellation to proceed.
Juliana Mohamad Noor, NUS vice president for further education, said: “The Department for Education and the Student Loans Company must work together to ensure that those learners whose provider went bust before they completed their course have their loans cancelled as soon as possible.
“These figures continue to highlight the need for the Department, the SLC and providers to work together so students have clarity on how they are protected in the event of provider failure, including the treatment of their student loans.”
An SLC spokesperson said they and the DfE have “continuously worked closely together to bring a resolution for these customers.
“We have written to them ahead of each new tax year to make sure that they are aware that their loan repayments continue to be deferred, and to ensure that no customer is financially disadvantaged while they await a decision.
“The legislation that allows the cancellation of these loans was enacted in summer and we will be writing to customers in the coming weeks to make them aware of their eligibility to have their loan cancelled and to outline the next steps of the process.”
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