Serious maladministration by the Student Loans Company, acting on behalf of the Welsh Government, resulted in a Welsh student falling into “considerable debt”, an Ombudsman investigation has found.

In addition to incurring an unexpected debt, Mr X (anonymised) suffered “considerable stress” as a result of a catalogue of errors made by the Student Loans Company (SLC), according to a new report issued by the Public Services Ombudsman for Wales.

The report found that the SLC failed to inform Mr X that he was not eligible for a tuition fee loan for the 2014/15 academic year in a reasonable and timely manner. This failure resulted in Mr X incurring over £7000 of tuition fees, which the SLC could not grant him a loan to pay, leaving him in significant debt.

The Ombudsman’s investigation found that the SLC incorrectly asked Mr X for evidence of his circumstances in 2015/16, despite being aware he was not entitled to funding and did not inform him of this in a reasonable timeframe.

The Ombudsman’s investigation revealed that the SLC knew from October 2015 that Mr X would not be entitled to tuition fee funding. Yet, it continued to request information on his circumstances. The body even erroneously granted his application for funding until February 2017, almost eighteen months later.

Commenting on the report, Nick Bennett, Public Services Ombudsman for Wales, said:

“It is highly concerning that the public body responsible for student finance was responsible for such a catalogue of errors in this case.

“My investigation found that the SLC’s maladministration led a student struggling with a health condition to incur significant debt, which in itself was highly stressful for the individual concerned.

“Compounding this was the poor handling of Mr X’s complaint by the SLC and an Independent Assessor appointed by Welsh Ministers, which took two years to address. I found that the SLC’s complaint handling process was confusing, at one point raising his expectations that he was entitled to funding, only for him to be disappointed when the position was clarified.

“When added to the debt Mr X had unknowingly incurred, this caused him further – and entirely unnecessary – stress.”

The SLC has accepted the findings of the investigation, and has agreed to apologise to Mr X, and pay him £500 redress. The Ombudsman has also recommended  that the SLC satisfies the debt Mr X incurred to his University between December 2014 and June 2015, which will now become payable to the SLC on the usual terms and conditions.

The SLC said that it had already commissioned a review of its complaint handling procedures and was in the process of working with the different UK administrations to implement changes.  The Ombudsman recommended that as part of the review of its complaint process, it should take on board the issues raised by this complaint.

The Welsh Government has also agreed to work with the SLC to amend its complaint handling process to bring it into line with best practice for complaint handling in Wales. The Public Services Ombudsman for Wales urges public service providers to adopt the Principles for Good Complaint Handling and Guidance, which can be found here.

To see the report, click here.